After Kraken, CFTC goes after 12 other firms for failure to register as FCMs

Getting your Trinity Audio player ready...

The U.S. Commodity Futures Trading Commission (CFTC) is going after a dozen more firms it claims have been offering digital currency and forex products without acquiring an operating license. The 12 have allegedly failed to register as futures commission merchants (FCMs), the same crime that the CFTC has charged Kraken cryptocurrency exchange with.

In a press release, the watchdog revealed it had filed 12 complaints against the firms, with each seeking orders directing the entities to cease and desist from violating the Commodity Exchange Act and CFTC regulations.

The 12 have allegedly been offering users the opportunity to purchase binary options based off the value of commodities like digital currencies and forex, according to the regulator. They have also been encouraging customers to transfer money or assets to them, all without applying for an FCM license.

An FCM is an entity licensed to buy or sell futures contracts options and retail off-exchange forex contracts or swaps.

The entities include Tradingforexpay and Cryptofxtrader, both New York-based but with offices in San Diego and Los Angeles respectively. The former requests its clients to send funds to its BTC address and claims to have adequate security to protect them, while the latter claims to be the leading binary options platform in the United States. Both falsely claim to be regulated by the CFTC, the regulator said.

Others include BinanceFxTrade, Globalnationfx, ProCryptoMinners, MaxForexOption, ProFx-Capitals, Prime Expert Trade, Smarter Signals, Ecotradeoptions and Star Fx Pro.

The CFTC also filed two other complaints against companies trading in derivative products that claim to be registered with the commission and members of the National Futures Association.

Vincent McGonagle, the acting director of the CFTC’s Division of Enforcement, commented, “Today’s actions reflect the CFTC’s dedicated efforts to aggressively root out bad actors falsely claiming to hold legitimate registrations and protect the trading public.”

The actions come just days after the CFTC announced that it had settled with Kraken exchange for similar violations. As CoinGeek reported, the exchange has been offering margined retail commodity transactions to U.S. clients without getting an FCM license.

Follow CoinGeek’s Crypto Crime Cartel series, which delves into the stream of groups—a from BitMEX to Binance, Bitcoin.com, Blockstream, ShapeShift, Coinbase, Ripple and
Ethereum—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market.