The Commodity Futures Trading Commission (CFTC) announced on Friday that a US Federal Court imposed a ban and a penalty against PaxForex, a forex broker, which operates under the regulation of St. Vincent and the Grenadines. Judge David Hittner of the US District Court for the Southern District of Texas determined that the forex trading platform offers illegal leveraged transactions in cryptocurrencies and commodities.
The default judgment orders PaxForex, which has a legal name dubbed “Laino Group Limited,” to pay a civil monetary penalty of $374,864. Furthermore, the platform was imposed with permanent trading, solicitation, and registration bans. “The order, entered on June 30, 2021, stems from a CFTC complaint filed on September 24, 2020, that charged PaxForex with engaging in illegal, off-exchange transactions in Ether, Litecoin and Bitcoin, in addition to precious metals and foreign currency, with retail customers on a leveraged, margined, or financed basis and acting as a futures commission merchant (FCM) without CFTC registration as required,” the CFTC detailed.
Also, the complaint filed before the court alleges that PaxForex has been involved in “unlawful” precious metals transactions such as Gold, Silver, and cryptos like Bitcoin (BTC) and Ethereum (ETH). “The defendant violated the CEA by failing to conduct these transactions subject to the rules of a board of trade that had been designated or registered with the CFTC as a contract market,” the regulator argued.
Violating the Commodity Exchange Act
Moreover, the CFTC noted that the broker, through its employees and agents, has been accepting or soliciting orders for forex and retail commodity transactions, as well as accepting money and cryptos. “The CFTC strongly urges the public to verify a company’s registration with the CFTC before committing funds. A customer should be wary of providing funds to an unregistered entity,” the CFTC warned.
Recently, in a separate case, the CFTC announced that it filed a civil enforcement action against Troy Manson and his company, ZTegrity Inc., for allegedly being involved in a forex-related fraud.