The Commodity Futures Trading Commission (CFTC) is tightening its oversight on the US derivatives market and has red-flagged 14 trading platforms that were falsely claiming to have been authorized in the country.
According to the announcement on Wednesday, none of these firms was registered as futures commission merchants (FCMs), but they were making false claims that they have CFTC registration and National Futures Association (NFA) membership.
These flagged trading platforms are Tradingforexpay, Cryptofxtrader, Bitfxprofit, Globalnationfx, BinanceFxTrade, MaxForexOption, ProCryptoMinners, ProFX-Capitals, Smarter Signals, Prime Expert Trade, Star Fx Pro, Excotradeoptions, Climax Capital FX and Digitalexchange24.com.
Almost all of these platforms are offering binary options with currency pairs and cryptocurrencies.
A Vigilant Regulator
CFTC is deemed to be one of the most strict derivatives regulators. It requires all derivatives providers to have an NFA membership and a license from itself for offering their services in the United States.
Despite the mandatory obligations, many platforms quietly offer services to US citizens without the proper authorization. While most of these platforms are fraudulent, many well-known companies are often caught for illegally offering derivatives products to US customers.
Most recently, the derivatives regulator slapped a $1.25 million fine on Kraken, one of the oldest and well-reputed crypto exchanges, for offering crypto margin products in the country.
Commenting on the bust, CFTC’s Division of Enforcement Acting Director, Vincent McGonagle, said: “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.”
Meanwhile, many companies are inching closer to gain authorization for offering crypto derivatives in the US. Coinbase, the publicly listed crypto exchange in the country, recently applied for an NFA membership, but it also has to gain a CFTC license before listing any crypto derivatives.
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