On May 27, 2020, the CFTC issued a final rule (2020 final rule) interpreting the actual delivery exception under Section 2(c)(2)(D) of the Commodity Exchange Act (CEA) within the specific context of retail commodity transactions involving digital assets, including virtual currency (VC) and cryptocurrency.

Under the final rule, without actual delivery of VC to a retail client within 28 days of the transaction, CFTC oversight will apply to both the person:

(see Legal Update, LabCFTC Issues Primer on CFTC Regulation of Virtual Currencies). The 2020 final rule became effective on June 24, 2020 and is codified at 85 C.F.R. § 37734.

On December 15, 2017, the CFTC proposed a legal interpretation on the proposed meaning of actual delivery within the specific context of retail commodity transactions in VC (see Legal Update, CFTC Proposes Legal Interpretation of Actual Delivery Exception for Virtual Currency Regulation). Following a 90-day comment period, the CFTC voted on March 24, 2020 to issue final interpretive guidance on the definition of "actual delivery" under Section 2(c)(2)(D)(ii)(III)(aa) of the CEA (see Legal Update, CFTC Issues Final Legal Interpretive Guidance on Actual Delivery for Digital Assets), on which the 2020 final rule is based.

For information on regulation of VC and cryptocurrency, see Practice Notes: