The US Regulator has Charged Foreign Trading Company over Offering Unlawful Leverage Transactions of Bitcoin
The US Commodity Futures Trading Commission (CFTC) has charged a foreign trading company with offering unlawful leveraged transactions in Bitcoin, Ether, and Litecoin.
Civil Enforcement Action against Company
CFTC has a “civil enforcement action” in the US court against trading site PaxForex of Laino Group Limited. According to the Commodity Futures Trading Commission, the company engages in illegal retail commodity transactions of Bitcoin, Ether, Litecoin, silver, and gold. Moreover, PaxForex did not register with the US regulator as a futures commission merchant (FCM).
Division of Enforcement Director James McDonald said:
“This action shows the CFTC’s continued commitment to ensuring that entities offering leveraged, retail transactions within our jurisdiction—including those involving digital assets—register with the CFTC.”
“According to the complaint, from at least March 2018 to present, PaxForex offered or engaged in unlawful retail commodity transactions in ether, litecoin, bitcoin, gold, and silver. The defendant violated the CEA by failing to conduct these transactions subject to the rules of a board of trade that had been designated or registered by the CFTC as a contract market.”
Company Pretend to Act as FCM
The complaint also explains that the foreign trading platform performed operations as a futures commission merchant via its employees. Moreover, it acted as “the counterparty for these transactions and extended credit or accepted money, securities, and property in the form of bitcoin and other assets in exchange for margin trades or contracts. Despite acting as an FCM, the defendant failed to register with the CFTC as required.”
While CFTC seeks “disgorgement of ill-gotten gains, civil monetary penalties, restitution, permanent registration and trading bans, and a permanent injunction against further violations of the CEA as charged.”
The US regulator asks people to check the registration number of the company before investing funds in it. A customer should not deposit funds in the company if it is not a registered company. The registration number can be found with NFA BASIC.