The U.S. Commodity Futures Trading Commission (CFTC) has settled with Falcon Labs, Ltd., marking its first action against an unregistered futures commission merchant (FCM) facilitating access to digital asset exchanges. The Seychelles-based firm did not admit or deny the findings but was ordered to pay over $1.7 million in fines and penalties
Falcon Labs was accused by the CFTC of acting as an intermediary without the necessary registration, enabling customers’ trading on various digital asset exchanges. The firm conducted futures and swaps trades through sub-accounts on platforms such as Binance.com. However, Falcon Labs updated its customer information collection and know-your-customer policies.
Ian McGinley, the Director of Enforcement of CFTC, said that the lower penalty is a result of Falcon Labs’ substantial cooperation and remediation efforts. The CFTC is determined to make this case a precedent so that the other digital asset intermediaries that are operating without the registration will come back to be aligned with the regulatory requirements.
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