CFTC Charges PaxForex for Offering Illegal Leverage Transactions in Bitcoin, Ether, Litecoin

Laino Group Limited also doing business as PaxForex is facing a civil lawsuit alleging that it is offering unlawful leverage transactions in cryptocurrencies and precious metals.

PaxForex is a company registered in St. Vincent and the Grenadines.

The Commodity Futures Trading Commission (CFTC) filed the complaint against foreign trading platform in the U.S. District Court for the Southern District of Texas.

CFTC’s allegations against PaxForex

In the complaint, the CFTC alleged that PaxForex failed to register as a futures commission merchant (FCM). Therefore, it is engaging in illegal retail commodity transactions in bitcoin, ether, litecoin, gold, and silver.

Its failure to register with the CFTC is a violation of the Commodity Exchange Act (CEA).

According to the Commission, the foreign trading platform engaged in unlawful retail commodity transactions from at least March 2018 to the present. PaxForex through is agents and employees allegedly acted as FCM by soliciting and accepting orders for retail commodity transactions.

In addition, the CFTC alleged that the foreign trading platform acted as a counterparty for the transactions and extended credit or accepted money, securities, and property in the form of bitcoin and other assets in exchange for margin trades or contracts.

CFTC ensures that commodity trading platform comply with the law

The Commission is seeking a court order requiring PaxForex to disgorge ill-gotten wealth and to pay civil monetary penalties. It is also seeking restitution, permanent registration and trading bans, and a permanent injunction against its further violations of the CEA.

In a statement, CFTC Division of Enforcement Director James McDonald said the civil enforcement action shows that the Commission remains committed to enforcing the CEA.

They are making sure that “entities offering leveraged, retail transactions within our jurisdiction—including those involving digital assets—register with the CFTC,” said McDonald.

“We will vigorously enforce these requirements to preserve market integrity and protect customers,” he added.

The Commission recently sued BitMEX owners for allegedly illegally operating the unregistered cryptocurrency trading platform.

The U.S. Attorney’s Office for the Southern District of Texas and the Federal Bureau of Investigation (FBI) help the CFTC in bringing the case against PaxForex.


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