On May 13, the Commodity Futures Trading Commission announced it had fined crypto brokerage firm Falcon Labs Ltd. approximately $1.7 million. The fines are penalties for the firm’s illegal facilitation of U.S. residents’ access to digital asset derivative exchanges. The commission has urged digital asset intermediaries in similar situations to report their activities to the agency.
Crypto Broker Fined Nearly $1.7M for Illegally Providing Access to Digital Asset Exchanges
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Falcon Labs Penalized for Operating as an Unregistered Futures Commission Merchant
The U.S. Commodity Futures Trading Commission (CFTC) announced on May 13 that it had fined crypto prime brokerage firm Falcon Labs Ltd. approximately $1.7 million for illegally assisting U.S. residents in accessing digital asset exchanges. The commission also ordered the brokerage firm to cease and desist from acting as an unregistered futures commission merchant (FCM).
According to a statement, the Seychelles-registered brokerage firm was issued an order to pay $1,179,008 in disgorgement. However, the order requires Falcon Labs to pay a reduced civil monetary penalty of $589,504 in recognition of its substantial cooperation with the commission’s Division of Enforcement.
Commission Sends Warning to Unregistered Intermediaries
Ian McGinley, the CFTC’s director of enforcement, hailed the penalty imposed on Falcon Labs as a step that clarifies the commission’s stance on unregistered digital asset brokers.
“The CFTC is taking the fight one step further by, for the first time, charging an intermediary that inappropriately facilitated access to those exchanges. Today’s action highlights that the CFTC will not hesitate to charge any entities — exchanges or intermediaries — that are providing customers access to digital asset products and services that require registration but have failed to appropriately register.”
Meanwhile, the CFTC urged digital asset intermediaries in similar situations to come forward and report their activities to the agency.
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