The U.S. Commodity Futures Trading Commission (CFTC) took its first action against an unregistered futures commission merchant (FCM) granting access to digital asset exchanges by settling with Falcon Labs, Ltd. Based in Seychelles, the company faced fines and penalties exceeding $1.7 million, though it neither admitted nor disputed the findings.
Ian McGinley, the CFTC’s Director of Enforcement, emphasized Falcon Labs’ extensive cooperation and efforts towards rehabilitation, which resulted in the reduced penalty. The CFTC aims to establish a precedent with this action to compel other unregistered digital asset intermediaries to comply with regulatory requirements.
Falcon Labs was accused by the CFTC of acting as an intermediary and facilitating trades on various digital asset exchanges without the required registration. Utilizing sub-accounts on platforms like Binance.com, the company engaged in futures and swaps trading. Falcon Labs has since updated its know-your-customer and consumer information gathering processes.
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