A government financial regulator has brought its first case against a Bitcoin-related firm, declaring that such cryptocurrencies are “commodities.”

With the move, the Commodity Futures Trading Commission (CFTC) has now clearly demonstrated what it hinted at in 2013—that it will go after Bitcoin-related companies that do not register with the agency and do not comply with federal law.

On Thursday, the CFTC announced that it had issued an order against and settled charges with Coinflip, operating under the name Derivabit. The company allowed Bitcoin users to engage in options and futures trading. Most of the site was disabled in July 2014, with all customer money refunded, before the CFTC contacted the site. It was fully closed in January 2015.

"For these contracts, Coinflip listed Bitcoin as the asset underlying the option and denominated the strike and delivery prices in US Dollars," the CFTC wrote in its order. "According to the derivabit.com website, a customer could place orders by registering as a user and depositing Bitcoin into an account in the user's name. Premiums and payments of settlement of the option contracts were to be paid using Bitcoin at a spot rate determined by a designated third­ party Bitcoin currency exchange. Users had the ability to, and in fact did, post bids or offers for the designated options contracts. Coinflip confirmed the bid or offer by communicating it to all users through its website."



Derivabit CEO Francisco Riordan did not immediately respond to Ars’ request for comment.

In a statement, CFTC Director of Enforcement Aitan Goelman said, “While there is a lot of excitement surrounding Bitcoin and other virtual currencies, innovation does not excuse those acting in this space from following the same rules applicable to all participants in the commodity derivatives markets.”

The CFTC did not immediately respond to Ars’ further questions.

UPDATE 12:21pm ET: Riordan told Ars that the settlement was "fair," and that he shut down the site as "there wasn't enough trade volume for the site to sustain itself."

He added: "They first contacted me with a Document Preservation letter after I took the site down. They had probably been watching it for a while and finally reached out because they thought that evidence was going to disappear."