CFTC charges 12 crypto options merchants with failure to register


The Commodity Futures Trading Commission is setting its sights on options trading firms that it says have failed to register.

On September 29, the CFTC announced charges against 14 merchants, 12 of which offer binary options based on foreign currencies and cryptocurrencies. The CFTC alleges that the 14 have either failed to register or have claimed to be registered with the CFTC already in customer-facing information.

As its name suggests, the CFTC regulates commodity futures markets. It does not regulate spot markets for commodities like bitcoin, which in the U.S. typically register at the state level as money services businesses.

However, platforms offering futures contracts on commodities to U.S. users are required to register with the CFTC. Crypto exchanges offering futures like BitMEX have ultimately been targeted by enforcement actions for failing to do so.

Indeed, the CFTC and Department of Justice unveiled their respective civil and criminal charges against BitMEX last October. Agencies often load up such bombshell cases at the end of the fiscal year in order to maximize their budget use. 

Despite their number, the platforms targeted in today's action are not especially high-profile, with many showing low trustworthiness scores on scam-checking websites. One, ProCryptoMinners, is misspelled. Another, BinanceFxTrade, seems to market itself off a non-existent relationship to the actual exchange, Binance.

At the same time, Binance itself is reported to be under investigation over trading activities by U.S. persons.

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May 5, 2022, 3:17PM UTC