http://arstechnica.com/business/2013/05/us-financial-regulator-we-could-regulate-bitcoin-if-we-wanted/ The American financial regulator for derivatives trading has told multiple news outlets that it is considering new rules for Bitcoin. "Here's what I know for sure: we could regulate it if we wanted. That is very clear," Bart Chilton, one of five commissioners at the Commodity Futures Trading Commission (CFTC) told Reuters in an interview on Monday. He also told CNBC on Tuesday that he wanted to make sure that the entire scheme was not a "house of cards." "I don't want to regulate everything under the sun," Chilton added in the CNBC interview. "If you guys want to be a shill for the financial industry and support a chattel currency that people use to purchase drugs and money withhave a party, man. My job is a regulator; I'm going to look after it." As the use of Bitcoin continues to grow, there are now Bitcoin-based hedge funds and shady derivatives websites where people can short bitcoins, effectively betting that the price will fall. Those sites are outside the United States, although there certainly are Americans using these sites. Its not Monopoly money were talking about herereal people can have real risk in these instruments, and we need to ensure that we protect markets and consumers, even in what at first blush appear to be out there transactions, Chilton told the Financial Times. In essence, were talking about a type of shadow currency, and there is more than a colorable argument to be made that derivative products relating to Bitcoin falls squarely in our jurisdiction. Should such regulations be put into place, it would mark the second significant new financial regulations for Bitcoin since new guidelines were enacted by the Financial Crimes Enforcement Network (FinCEN) in March 2013. As we reported then, the new rules stipulate that "a person that creates units of convertible virtual currency and sells those units to another person for real currency or its equivalent is engaged in transmission to another location and is a money transmitter" and is therefore subject to these federal regulations. Bitcoin advocates often cite the fact that the US dollar isnt based on anything eitherPresident Richard Nixon took us off the gold standard in 1971. However, there is a massive legal and regulatory infrastructure designed to prevent volatility, fraud, and other malfeasance. There are numerous entities, including the CFTC, the Federal Reserve, the Treasury Department, and the Securities and Exchange Commission enforcing the laws. As a decentralized protocol, Bitcoin has none of these. The bank that is storing my money is highly regulated by federal regulators and backed by a government with a huge army behind it, James Angel, a business professor at Georgetown University, told Ars last month.