The US Commodity Futures Contracts Trading Commission (CFTC) announced on Wednesday (29) that it has filed a lawsuit against 14 companies that offer trading services in binary options, forex, cryptocurrencies, and that also operate in the over-the-counter (OTC) market ). According to the autarchy, which oversees the derivatives market, the companies were summoned for acting without the proper licenses.
According to a statement from the CFTC, 12 of the companies investigated have acted as brokers for the trading modality called ‘Futures Commission Merchant’ (FCM), which is when an entity renegotiates futures contracts outside the stock exchange, as occurs with binary options. Another type of service offered, according to the autarchy, is the Retail Foreign Exchange Dealer (RFED), which is an over-the-counter market.
In the Commission’s note, the companies Climax Capital FX and Digitalexchange24.com are mentioned as the companies that lied to the public when reporting that they had the approval of US regulatory bodies. Its headquarters are reportedly located in cities in Texas and Arkansas.
“Today’s actions reflect the CFTC’s dedicated efforts to protect investors by aggressively rooting out evildoers who claim to have legitimate records,” said Director Vincent McGonagle.
The activities, however, need to be registered with the CFTC and NFA (National Futures Association) bodies as these platforms offer the general public the opportunity to purchase binary options based on the value of commodities such as foreign currencies and cryptocurrencies, including Bitcoin, and encourage customers to transfer cash or assets to them, the note explains.
All the other companies mentioned allegedly have headquarters in New York. See the list.
Tradingforexpay; Cryptofxtrader; Bitfxprofit; Globalnationfx; BinanceFxTrade; MaxForexOption; ProCryptoMinners; ProFX-Capitals; Smarter Signals; Prime Expert Trade; Star FX Pro; Excotradeoptions.
Changes in CFTC and SEC
The CFTC traditionally plays a secondary role to the Securities and Exchange Commission (SEC), but there are signs that this may be changing as the two regulators vie for power, Coindesk commented on the matter. That’s because the Kraken exchange recently agreed to pay $1.25 million to close a case with the CFTC by not registering as an FCM and offering such services.
It does not stop there. The site also recalled that the CFTC fined BitMEX $100 million, which agreed to the amount to close a lawsuit involving several civil charges.
Another point, according to Coindesk, is the decrease of leaders in the CFTC. As he said, with the announcement that Commissioner Dan Berkovitz would leave the CFTC to serve as the SEC’s general counsel, the body that usually works with five people will now have just two.