CFTC Goes After Firms Falsely Claiming Regulatory Status in the US

The Commodity Futures Trading Commission (CFTC) today warned against false claims about agency registration and endorsements related to trading in forex, cryptocurrencies, and derivatives.

First up on the warning list are Bitfx24option.com, Fidelityfxtrade.com, Granttradefx.com, iMarketsserviceFX.com, Toptradecapitalfx.com, Westtechtrade.com, Westintrade.com, Yobcryptotrade24.com, Zenithoptionstrade.net, and Zenithtradermarkets.com. The CFTC said these brands published identical bogus statements that they are registered FCMs and RFEDs with the agency.

Some of these firm falsely claim to be regulated by the US National Futures Association (NFA), but without providing any registration number to confirm its regulatory status. A search on the NFA’s website using these companies’ names reveals its false claims as no such brands authorized by the independent watchdog.

The NFS self-regulates futures trading and is itself supervised by the US Commodity Futures Trading Commission (CFTC). Both watchdogs were given massive new responsibilities under the Dodd-Frank law, including setting requirements for how much borrowed money, or margin, the firms’ clients can use on currency trades.

Next is Sumtrades.com, allegedly located in Georgia, which in addition to the aforementioned false claims provided an NFA ID belonging to an individual who was once registered with the CFTC but died in 2009.

The regulator has also blacklisted Goldman Global Investment Funds Ltd., Merryl Morgan, Swiss FX Trade, and Ultracapitals, all had never registered in any capacity or actually licensed by the commission ‎or any other competent authority in the country.

Due to the illegal nature of its conduct, these firms have been ‎instructed by the CFTC to cease and desist from providing financial services and engaging in ‎finance-oriented activities. Offering such services in this manner is a violation of the law in ‎the US, the watchdog said in its statement that came in parallel with a warning about the increase in similar solicitations.

According to the CFTC, many of these foreign entities are acting in a capacity requiring them to be registered with the CFTC. Registration allows the agency to provide greater security and oversight of the industry by examining whether firms meet minimum financial standards as well as disclosure, reporting, and recordkeeping requirements.

However, the press release emphasized that registration is no guarantee against fraud or mismanagement by an unethical firm, although it does help bring a higher level of security and accountability to the industry.