The Commodity Futures and Trading Commission (CFTC), has charged 12 firms in New York dealing in crypto options. The firms have been charged for failing to seek registration with the commodities regulator.

Some of the firms that have been charged by this regulatory body include BinanceFx Trade, Bitfxprofit, Smarter Signals and Star FX Pro. These are little known names in the crypto sector. More so, BinanceFx does not have any affiliation with the Binance exchange platform despite having similar names.

Failure to register as FCMs

The regulator also issued a press release on September 29 where it stated that the 12 firms dealing in crypto businesses failed to seek the necessary registration to operate as futures commission merchants (FCMs).

The 12 crypto firms are allegedly situated in New York. Other 2 firms were also charged for posting false information such as stating they were registered with the CFTC, and had a membership with the National Futures Association (NFA).

Speaking on the matter, CFTC’s Acting Director at the Division of Enforcement, Vincent McGonagle, stated that, “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 FCM registration is mandatory for firms that are dealing with commodities through futures products. The CFTC deals in developing the regulatory framework for commodities and derivatives products such as futures contracts, options and swaps. However, the CFTC does not deal in the spot trading market.

CFTC Cracks Down on Multiple Crypto Firms

The recent days have been filled with several regulatory actions taken by the CFTC. On Tuesday, the regulator ordered Kraken, a leading cryptocurrency exchange, to pay civil penalties amounting to $1.25 million for violating the Commodity Exchange Act.

In August, the CFTC together with FinCEN received $100 million in a civil penalty from BitMEX, a crypto derivatives exchange. BitMEX was found to be running the cryptocurrency trading platform illegally and failed to uphold anti-money laundering requirements.

This week, Dan Berkovitz, a CFTC Commissioner announced that he will be leaving the commission and will be heading over to the Securities and Exchange Commission to hold the position of general counsel. Berkovitz will work with the commission to bring a better regulatory framework that will boost investor protection.

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