1Pool Crypto Broker Owner Fined By CFTC For Selling To US Investors Without Regulatory Approval
Owner Of 1Pool Fined By CFTC For Selling To US Investors Without Regulatory Approval
The regulatory landscape for Americans is a little difficult to decipher, considering how many entities are actually in charge of governing cryptocurrencies. Since this is a well-known detail about the US regulatory space, most exchanges are careful to either be compliant with the regulations or to stay out of the country entirely. However, Patrick Brunner of 1Pool did not follow these protocols, leading to a major fine from the Commodity Futures Trading Commission (CFTC).
The owner of the cryptocurrency brokerage received a fine of nearly $1 million, as a result of the opportunity he gave to American investors – margined trading in Bitcoin. According to the CFTC, Brunner’s mistake was in the lack of registration as a futures commission merchant. They also failed to follow the necessary protocols for anti-money laundering enforcement and were participating as a counterparty to a lot of the trading activities.
Some of the fines issued so far have been relatively substantial, like the $25,000 fines that were assigned to two crypto mining operations in Texas. These fines were assessed for the lack of securities registration, even though the laws were not entirely clear of if their offerings qualified as securities tokens. However, the imposed fees on others, like a man in California who was storing funds in Mexico, may have been more justified.
With 1Pool, it is likely that the fine was justified because Brunner chose to open his brokerage in a country that has largely become a place for scammers – the Marshall Islands. As a result, Brunner’s fines add up to $990,000, which include $175,000 in civil penalties and $246,000 in gains. It also includes over half a million dollars in Bitcoin to be repaid.
Director of Enforcement at the CFTC, James McDonald, added that he hopes that other intermediaries will see the results of these cases, and feel deterred from violating or failing to comply with these requirements. McDonald has promised that there will continue to be more investigations and prosecution for any other violations of the CFTC’s laws. Any suspicious activity can be reported by calling 866-FON-CFTC (866-366-2382).
For the full press release from the CFTC, visit https://www.cftc.gov/PressRoom/PressReleases/7886-19.