Turner Wright2 hours agoCFTC announces $1.8M settlement against brokerage firm FalconXThe regulator reported the firm voluntarily improved its practices after the CFTC’s civil suit with Binance and its former CEO Changpeng Zhao.2856 Total views8 Total sharesListen to article 0:00NewsOwn this piece of crypto historyCollect this article as NFTJoin us on social networksThe United States Commodity Futures Trading Commission (CFTC) announced that it had both filed and settled charges against cryptocurrency brokerage firm Falcon Labs for roughly $1.8 million in disgorgement and penalties.
In a May 13 notice, the CFTC said Falcon Labs, owned by FalconX, had failed to register as a futures commission merchant, “inappropriately facilitat[ing] access to digital asset exchanges.” The settlement required FalconX to cease offering services to U.S. residents and pay roughly $1.2 million in disgorgement and $600,000 in civil monetary penalties.
“The CFTC’s enforcement program has made clear it will not tolerate digital asset exchanges that fail to register with the CFTC or comply with the agency’s rules that maintain integrity in the derivatives markets,” said Enforcement Director Ian McGinley. “And now the CFTC is taking the fight one step further by, for the first time, charging an intermediary that inappropriately facilitated access to those exchanges.”
The settlement alleged that FalconX facilitated orders for digital asset derivatives for U.S. users from October 2021 to March 2023 through its ‘Edge’ product. According to the CFTC, the brokerage firm voluntarily improved its practices after its lawsuit with Binance and former CEO Changpeng Zhao. In that case, the CFTC and other U.S. authorities settled for $4.3 billion in November 203.
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The regulator said that FalconX had provided “substantial cooperation and remediation,” resulting in the firm receiving a lower penalty. The CFTC order included that the firm was not “admitting or denying” any of the regulator’s findings or conclusions. Cointelegraph reached out to FalconX but did not receive a response at the time of publication.
On May 6, CFTC Chair Rostin Behnam said crypto firms operating in the U.S. could expect “another cycle of enforcement actions” within two years. The commodities regulator filed 47 enforcement actions against crypto firms in 2023.
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