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CFTC Files Charges Against Crypto Trading Platforms for Failing to Register as Futures Commission Merchants (FCMs) and Making False Registration Claims
Practical Law Legal Update w-032-9635 (Approx. 5 pages)
CFTC Files Charges Against Crypto Trading Platforms for Failing to Register as Futures Commission Merchants (FCMs) and Making False Registration Claims
by Practical Law Finance
| Published on 12 Oct 2021 • USA (National/Federal) |
The CFTC filed charges against 12 digital asset and cryptocurrency trading platforms for failing to register as futures commission merchants (FCMs) and two platforms for making false claims regarding CFTC registration and National Futures Association (NFA) membership.
On September 29, 2021, the CFTC filed charges against:
- 12 digital asset and cryptocurrency trading platforms for failing to register as futures commission merchants (FCMs) – see Failure to Register as FCM.
- Two digital asset platforms for making false claims regarding CFTC registration and National Futures Association (NFA) membership – see False Claims of CFTC Registration and NFA Membership.
Failure to Register as FCM
The CFTC charged the following 12 entities with soliciting or accepting orders for binary options that are based on the value of a variety of assets including commodities such as foreign currencies and cryptocurrencies including Bitcoin, and accepting and holding customer money in connection with those purchases of binary options, without registering as an FCM:
Each compliant directs the entity to cease and desist from further violations and provides the entity with 20 days to serve and file an answer to the allegations.
False Claims of CFTC Registration and NFA Membership
The CFTC also filed complaints alleging that two entities, Climax Capital FX and Digitalexchange24.com, offered services related to trading in cryptocurrency futures or other derivative products while falsely claiming to be registered with the CFTC and members of the NFA.