The Commodity Futures Trading Commission (CFTC CFTC The 1974 Commodity Exchange Act (CEA) in the United States created the Commodity Futures Trading Commission (CFTC). The Commission protects and regulates market activities against manipulation, fraud, and abuse trade practices and promotes fairness in futures contracts. The CEA also included the Sad-Johnson Agreement, which defined the authority and responsibilities for the monitoring of financial contracts between the Commodity Futures Trading Commission and the Securities and Exchange Commiss The 1974 Commodity Exchange Act (CEA) in the United States created the Commodity Futures Trading Commission (CFTC). The Commission protects and regulates market activities against manipulation, fraud, and abuse trade practices and promotes fairness in futures contracts. The CEA also included the Sad-Johnson Agreement, which defined the authority and responsibilities for the monitoring of financial contracts between the Commodity Futures Trading Commission and the Securities and Exchange Commiss Read this Term) has charged 14 retail foreign exchange dealers (RFED) and Futures Commission Merchants (FCMs) for 'fraudulently claiming' to be registered with the agency. The US derivatives market watchdog announced the charges on Friday, noting that the platforms claim to be based in the US, the UK and Sweden.

According to the CFTC, the platforms are Cross Trade FX, Bit Block FXtrades, Bit Trading, Voltfxtrade, Bitfinmarket.com, Fast Option Subdivision and Garantitrademiness.com. The others are Garantitrademinex.net, Prime Finance Network, Trust Pay Market, Instantearners247.com, TFX Trading, Betatradeoptions.com and Sparkleswhite.com.

Today @CFTC announced it charged 14 entities for fraudulently claiming to be registered with the CFTC as futures commission merchants (FCM) and retail foreign exchange dealers (RFED). Learn more: https://t.co/bFziPogzdW

— CFTC (@CFTC) April 21, 2023

FX Dealers Make False Registration Claims

According to the CFTC, from at least January this year, the platforms have been claiming to be registered FCMs and RFEDs. Additionally, they falsely claimed to be members of the National Futures Association (NFA), a membership-based self-regulatory organization for participants in the US futures and derivatives markets. However, they in fact "are not registered with the CFTC,” the regulator pointed out.

“Twelve of the entities claim to have an identical NFA Identification Number. The remaining two claim to have a different, but identical, NFA Identification Number,” the CFTC noted.

In its complaints, the CFTC asked the court to order the platforms “to cease and desist” from violating the country’s commodity exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term rules and its own regulations.

“Today’s actions continue to reflect the CFTC’s ongoing efforts to vigorously protect customers and promote market integrity by taking action against bad actors seeking to promote themselves through false claims of registration,” noted Ian McGinley, the CFTC’s Director of Enforcement.

The CFTC’s action against the dealers came less than a month after the derivatives watchdog charged Binance and its CEO, Changpeng Zhao for operating an illegal digital asset derivatives exchange. On top of that, the watchdog sued Samuel Lim, Binance’s former Chief Compliance Officer, and called the leading exchange’s compliance process a 'sham'. Zhao refuted the allegations, calling them “an incomplete recitation of facts.”

CFTC Crackdowns on Ponzi Schemes

Since the start of the year, the CFTC has cracked down on several forex and cryptocurrency Ponzi schemes. In February, the derivatives market supervisor bust three interconnected $145 million FX Ponzi schemes that defrauded more than a thousand investors.

At the start of the month, the watchdog sued a California-based company and its CEO for running a $7 million crypto Ponzi scheme. The scheme offered investors a daily return of at least 2.5% and claimed to be using 'Robot Traders' to trade with customers’ digital assets.

Meanwhile, in January, the CFTC charged Mango Markets operator, Avraham Eisenberg, with fraud and market manipulation in what is the watchdog’s first regulatory enforcement against a decentralized platform for 'oracle manipulation'.