CFTC Adds 45 Online Trading Platforms To Its RED List
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The US Commodity Futures Trading Commission (CFTC) has flagged 45 online trading platforms operating in other countries. One of the flagged entities is the Belarusian division of the Capital.com multi-regulated brokerage company.
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CFTC flags Capital.com’s Belarusian entity
On Monday, the CFTC announced that it had added Capital.com’s Belarusian entity to its Registration Deficient List (RED List). The RED List was unveiled in September 2015, and it shows the “unregistered foreign entities” that the derivatives regulator believes are offering services to US investors without the proper authorization.
The Director of Enforcement at the CFTC, Ian McGinley, said that since the RED List was introduced, the regulator has listed several entities. These entities had the potential to cause significant financial damage to unsuspecting investors in the US.
“It is for this reason we strongly encourage all customers to check the RED List before they trade because they may have little or no protections if they choose to trade with unregistered firms that operate outside the US,” McGinley said.
Capital.com’s Belarusian division is just one of the 45 platforms that have been added to the RED List. The other flagged platforms include firms offering FX services, such as 24OptionForex, BBT Forex, AlvaroFXPro, CedarFX, and BBT Capital Limited, among others.
The list has also included some firms linked to the crypto industry, such as CryptoFXMarket, CryptoInvestments, CryptoLifeTrade, CryptoBinaryTrade, and CryptocurrencyBitcoinxtrade, among others.
In the recent announcement, the CFTC referred to the Commodity Exchange Act, which needs intermediaries within the derivatives sector to register with the commission. The CFTC describes an intermediary as an intermediary or firm that acts on behalf of another person when trading financial instruments like futures, options, and swaps.
CFTC has flagged a total of 240 unregistered firms
The recent addition of 45 trading firms has now seen the CFTC flagging a total of 240 unregistered foreign entities that have now been added to the RED list. In July 2022, the regulator added 34 illegal forex and binary options firms to the list. In April, the commission sued 14 retail FX dealers and futures commission merchants over fraudulent claims that they were registered with the commission.
The CFTC is not the only global regulator that is cracking down on illegal trading platforms. Over the past week, the UK’s Financial Conduct Authority (FCA) has flagged 44 illegal trading platforms. On Monday, the New Zealand regulator blacklisted two platforms.
CFTC wins major crypto case
The CFTC also secured a major win after a federal judge ruled in favor of the commission. The ruling pertained to a lawsuit that alleged the Ooki decentralized autonomous organization (DAO) provided access to unregistered commodities.
The ruling on this lawsuit has demonstrated that decentralized finance (DeFi) players are not immune to regulatory scrutiny. US District Judge William H. Orrick ruled that the Ooki DAO ran an illegal trading platform and unlawfully operated as an unregistered futures commission merchant (FCM). The judge ordered Ooki DAO to pay $643,542 in penalties.
