The US Commodity Futures Trading Commission (CFTC) has published a proposed interpretation on its authority over retail commodity transactions involving digital currencies, such as bitcoin.

In September 2015, the CFTC declared that Bitcoin and other virtual currencies are a commodity covered by the Commodity Exchange Act. In its proposed interpretation, the agency set out its view regarding the “actual delivery” exception that may apply to digital currency transactions.

The agency has outlined two primary factors which will determine that an “actual delivery” of retail commodity transactions in virtual currency has occurred:

“(1) a customer having the ability to: (i) take possession and control of the entire quantity of the commodity, whether it was purchased on margin, or using leverage, or any other financing arrangement, and (ii) use it freely in commerce (both within and away from any particular platform) no later than 28 days from the date of the transaction; and

(2) the offeror and counterparty seller (including any of their respective affiliates or other persons acting in concert with the offeror or counterparty seller on a similar basis) not retaining any interest in or control over any of the commodity purchased on margin, leverage, or other financing arrangement at the expiration of 28 days from the date of the transaction.”

The CFTC is now seeking public feedback on the proposed Interpretation. It will be open for public comment for 90 days from publication in the Federal Register.

In addition, the CFTC has launched a virtual currency resource Web page, cftc.gov/bitcoin. It said:

“This dedicated page is a central repository for Commission-produced resources about virtual currency, and is designed to educate and inform the public about these commodities, including the possible risks associated with investing or speculating in virtual currencies or recently launched Bitcoin futures and options.”

Furthermore, the CFTC has released a Customer Advisory, titled “Understand the Risks of Virtual Currency Trading.” It details the risks of purchasing virtual currencies in the cash market, in addition to those risks present in virtual currency futures and options.