The U.S. Commodity Futures Trading Commission (CFTC) has entered into a court case that could determine if it has the authority to regulate cryptocurrencies.

Reuters reported on Wednesday that the CFTC had sued Randall Crater’s tech company and the cryptocurrency My Big Coin in January.

Allegedly, Crater and his company “perpetrated a $6 million [USD] fraud on people who wanted to buy My Big Coin.”

CFTC Court Case

According to the article, Crater’s lawyers have said the CFTC does not have any authority on the cryptocurrency because it is not a commodity where future contracts are traded, which is what the commission focuses on regulating.

Gregory Kaufman, a lawyer at the Eversheds Sutherland law firm, has said that the final decision of the case “would have a chilling effect on the CFTC’s application of its powers in this area,” if the ruling was against the CFTC.

The decision could affect its ability to police cryptocurrency frauds, as the only cryptocurrency where future contracts are traded in the US is Bitcoin (available on Coinbase) (BTC), according to Reuters.

Katherine Cooper, a lawyer for Crater, had this to say on the court case;

“Our argument boils down to the fact that because My Big Coin does not have future contracts or other derivatives trading on it, it is not a commodity.”