October 31, 2019
CFTC Charges Foreign Trading Platform for Failing to Register with the CFTC
Washington, DC – The U.S. Commodity Futures Trading Commission today issued an order filing and settling charges against Switzerland-based XBT Corp. SARL d/b/a First Global Credit (FGC) for its failure to register with the Commission as a futures commission merchant (FCM).
The order requires FGC to pay a $100,000 civil monetary penalty and disgorge gains received in connection with its violations, and to cease and desist from future violations of the Commodity Exchange Act (CEA). In the order, the Commission recognizes that FGC’s civil monetary penalty in this matter was substantially reduced in light of FGC’s cooperation and remediation.
“This case demonstrates that the CFTC will hold intermediaries accountable if they solicit or accept orders without properly registering with the agency. This case also underscores that the Commission will continue working with our law enforcement and regulatory partners to ensure the integrity of our markets,” said CFTC Director of Enforcement James McDonald.
The order finds that from March 2016 to July 2017, FGC acted as a FCM by soliciting or accepting orders for futures from U.S. customers and by accepting bitcoin to margin their trades without being registered with the Commission. FGC’s website and trading platform solicited or accepted orders from U.S. customers for the purchase and sale of commodity futures listed on the Chicago Mercantile Exchange Globex trading platform.
According to the order, FGC established a separate page on its website to assist customers by instructing them how to “Trade Futures Using bitcoin as collateral margin.” FGC’s website further stated, “Since you retain your bitcoins (and the growth benefit) we arrange a loan to cover the margin needed to place the trade.” Trades on FGC’s trading platform were settled in bitcoin. FGC violated Section 4d(a)(1) of the CEA which makes it unlawful for any person to be a FCM without registering with the Commission.
The CFTC wishes to thank the U.S. Attorney’s Office for the Southern District of Texas, the Department of Justice, the Federal Bureau of Investigation, and the Securities and Exchange Commission for their assistance in this matter. The CFTC also thanks and acknowledges the assistance of the Swiss Financial Market Supervisory Authority (FINMA).
The Office of Data and Technology staff members who assisted with this matter are Salma Mack and Ricky Archer.
The Division of Enforcement staff members responsible for this action are Harry E. Wedewer, Elizabeth Padgett, Jordon Grimm, Candice Aloisi, Lenel Hickson, and Manal Sultan.