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Crypto Futures Provider Charged by CFTC for Violating Registration Requirements

Stepping up its enforcement against a futures trading service, the Commodity Futures Trading Commission (CFTC) claimed that the company had set up shop in the United States illegally. Charges were filed against a financial services company called Laino Group earlier this week. Based in St. Vincent, the company has been accused of offering digital assets to investors in the country without registering. The charges indicate that the company had sold futures on a number of commodities, which include Bitcoin, Litecoin, and Ether. In particular, the company had solicited American investors to buy the assets, doing so even though they were not registered to offer these services.

According to the announcement, the Laino Group was operating under the name of ‘PaxForex’. The firm allegedly got a network of affiliates based in the U.S. to target American retail investors, thereby violating the Commodity Exchange Act. While the agency didn’t disclose the exact extent to which the firm had been operating, it did order the company to return all accumulated funds and ask for relief. The filing outlined that the CFTC was asking the company to provide an accounting of all of its assets and liabilities, along with the funds it had received from its clients or paid to them.

However, the most noteworthy fact to take away from this matter is that the CFTC is now regarding other digital assets in the same way as commodities. From the get-go, the agency has maintained that they consider Bitcoin a commodity, but now it is apparent that they are extending the same classification to the other altcoins that are available in the market. The unsurprising hard stance that the CFTC has taken against a crypto firm, along with the classification, seems to be a precursor to what they have in store for the cryptocurrency industry. 

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It is important to note that because it could become the regulator of the crypto industry soon enough. Last week, a ranking member of the Committee on Agriculture of the House of Representatives, Rep. Mike Conaway (R-TX) had proposed legislation by the name of the Digital Commodity Exchange Act. This proposed legislation may end up making the CFTC the sole regulator of the cryptocurrency industry. According to the bill, if the watchdog is granted exclusive regulator rights, any company that wishes to enter the space would no longer need to get approval from the financial regulators of the state they would be based in. 

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The agency elaborated that they were planning to come up with a holistic crypto framework for promoting investor protection and responsible promotion of digital assets. A number of goals have been added by the framework for the next four years, after which the tenure of Chairman Heath Tarbert would come to an end. Overall, the strategy involves pro-innovation discussions. Most prominently, developments in derivatives on digital assets, along with the digitization of trade that had happened over the years, was praised by the CFTC. They added that markers have adapted to new technologies quickly. 

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Bentley Kapoor (India)

Bentley is a cryptocurrency enthusiast and trader, his articles are news and platform review based. His writings are brought to you through his 10 years of experience in the cryptocurrency markets.

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