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Looks like the United States Commodity Futures Trading Commission (CFTC) is about to go to Thanos on this recent development. The regulating agency has filed charges against 14 entities for either having misleading claims that they bear both National Futures Association membership and CFTC registration or have been unsuccessful in registering as futures commission merchants under the said government agency.
Cryptocurrency firms in trouble
On September 29, the CFTC released a press statement on its website announcing such legal action. Reports noted that a dozen of these cryptocurrency exchanges were pretty much unknown exchange entities that are not yet FCM-registered.
That said, CFTC’s Division of Enforcement Director Vincent McGonagle also commented on this saying that the actions reflect the regulating agency’s dedicated efforts to aggressively root out what they describe as bad actors that are fraudulently claiming to have legitimate registrations and safeguard the trading public.
Further, the CFTC went on to give the public a heads up and scrutinize first the company’s CFTC registration prior to committing funds. Otherwise, one should be extra careful in releasing funds to such a firm. The agency even provided a link for people to go to if they want to check on a trading firm’s registration status.
Have you traded with them?
As for the twelve entities that are still not registered as FCMs here are their names: Tradingforexpay, Bitfxprofit, Cryptofxtrader, Globalnationfx, MaxForexOption, BinanceFxTrade, Smarter Signals, ProFX-Capitals, ProCryptoMinners, Star Fx Pro, Excotradeoptions, and Prime Expert Trade. What’s interesting here is that all of these firms – according to CFTC – are allegedly based in New York, not to mention that almost all of them claim to be regulated by the CFTC.
Kraken and CFTC
Kraken, on the other hand, may not be included in the roster of legally challenged cryptocurrency companies, but they too have a debacle of their own with the CFTC. Reports suggest that they’ve paid a hefty sum of $1.25 million to straighten out the charges filed by the agency against them. As for the cryptocurrency exchange’s violation, it green-lit customers to unlawfully trade margin products that are connected to bitcoin (BTC) or other cryptos. Just like the 12 firms, Kraken is also not yet registered as a futures commission merchant.
According to a separate CFTC report, Kraken had offered marginal retail commodity transactions in the form of digital assets to customers in the U.S. who are not even eligible contract participants. Further, it was revealed that this happened in the course of over a year (June 2020 ‘til July 2021).
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
