The CFTC has released their final interpretative guidance on what counts as "actual delivery" for digital assets. The Commodity Future Trading Commission (CFTC) is the primary American regulator of derivatives. They are the lesser known counterpart to the US Securities Exchange Commission (SEC).

This is related to the Canadian Securities Adminitrator's guidance a few months ago about "immediate delivery" of digital assets within Canadian securities laws (and footnote 114 refers to it directly). I expect that the CFTC's view will be influential on Canadian regulators.

The full guidance is available in PDF form (as voted upon yesterday) here: The background section provides a detailed history of developments in American derivatives jurisprudence and is followed by a summary of many comment letters the CFTC has received from industry players about this topic (there was a consultation period before the release of this interpretation).

The CFTC's interpretation is that "actual delivery" occurs within the context of virtual currency when:

(1) A customer secures: (i) 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) the ability to use the entire quantity of the commodity freely in commerce (away from any particular execution venue) no later than 28 days from the date of the transaction and at all times thereafter; 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) do not retain any interest in, legal right, 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.

Furthermore, "The Commission believes that, in the context of an “actual delivery” determination in virtual currency, physical settlement involving the entire amount of purchased commodity must occur. A cash settlement or offset mechanism ... is not consistent with the Commission's interpretation."

Pages 32-35 provide several examples of the Commission's interpretation.