The CFTC has targeted 12 crypto exchanges offering options on charges of not being registered with its authority.
The CFTC is the US authority responsible for monitoring and protecting investors who buy commodities.
CFTC against unregistered crypto exchanges
The CFTC’s announcement targets 14 exchanges that sell binary options, based on commodities, foreign currencies and cryptocurrencies. Of these, just 12 also sell options on Bitcoin. None, however, were registered, so they did not have the necessary authorizations.
These are little-known platforms, most of which are based in New York.
Reading through the names, BinanceFxTrade also comes up, but on closer inspection of the site, it has nothing to do with the giant Binance.
Acting Director of Enforcement Vincent McGonagle said:
“Today’s actions reflect the CFTC’s dedicated efforts to aggressively root out bad actors falsely claiming to hold legitimate registrations and protect the trading public”.
The purpose of the authority in fact is to protect investors from bad investments. The first objective is therefore to screen out those who do not meet regulatory requirements, including the necessary licences.
US regulatory clampdown
The CFTC’s actions show that the US authorities are not prepared to tolerate this kind of “Wild West” surrounding the cryptocurrency sector. After all, Gary Gensler, chairman of the SEC, recently announced that unregulated platforms will not have it easy.
In the US, regulation is quite strict, so much so that a giant like Binance has had to open a sort of subsidiary, Binance US, dedicated solely to US users.
Even Coinbase, which is at home in the US, is having problems launching new products due to a lack of agreements with the SEC.
For its part, the CFTC has made it known that it cannot oversee the entire cryptocurrency industry. Some things are regulated by the SEC, specifically, securities, while commodities are regulated by the CFTC, which also regulates all other activities that are commodity-based. Since Bitcoin is considered a commodity and not a security, the CFTC can take action against those who sell BTC and derivatives without proper licenses, which is what happened with the 12 exchanges mentioned above.
However, it is clear that the US authorities are standing by their announcements: there will be no rest for those who think they can operate without a licence and without providing the necessary protections for investors.