The U. S. Commodity Futures Trading Commission (CFTC) has recently announced that XBT Corp. SARL would be fined $100,000 USD for failing to register with the regulator as a futures commission merchant before participating in transactions as one.
According to the filing, XBT was doing business under another company called First Global Credit and it failed to register with the CFTC before it. Now, the corporation will have to pay the civil monetary penalty and cease from all violations of the act.
The CFTC also informed that the amount of money that XBT had to pay was diminished because the company decided to cooperate with the regulator to remediate the issues that happened. As soon as they were notified, representants from the financial provider complied.
From March 2016 to July 2017, First Global Credit acted as what could be considered a futures commission merchant. It solicited and accepted orders from customers of the country who wanted to buy futures from it. The company went as far as creating a page on its site that was used to assist the customers to participate in these unregulated transactions.
By using the services provided by the companies, they could use BTC as collateral to invest in margin trading for futures. While the action is not necessarily illegal, the fact is that doing this while not informing the CFTC is, as it violates Section 4d(a)(1) of the regulator’s code.