The United States Commodity Futures Trading Commission (CFTC) has updated its sanctions list. Accordingly, the CFTC has added 45 organizations to its RED list, including companies that offer crypto-related services.
CFTC adds 45 companies, including crypto companies, to its RED list
cryptocoin.com As you follow, the US Commodity Futures Trading Commission (CFTC) added 45 more unregistered foreign entities to its List of Lack of Registration (RED List) yesterday. Among these organizations are companies operating in the crypto space. The CFTC has issued a statement on this matter. In this statement, he underlined his determination to help protect Americans from fraud. In addition, Executive Director Ian McGinley made the following statement regarding the issue:
For nearly a decade, the CFTC has listed organizations on the RED List that have the potential to cause irreparable financial harm to unsuspecting Americans. Therefore, we strongly encourage all our customers to check the RED List before making a transaction. Because they may have little or no protection if they choose to transact with unregistered firms operating outside the US.
The CFTC has added the following 45 new foreign entities to its RED List.
Source: CFTCHow does the Commission create the RED list?
The CFTC launched the RED List application in 2015. The Commission has so far added more than 240 organizations to the RED List. To add to the list, the CFTC has set some criteria. Accordingly, a firm enters the RED List when it appears that the CFTC is not registered with the CFTC from investigative tips and public inquiries and appears to be operating in a registration-required capacity, such as trading binary options, foreign exchange (forex), or other products.
The Commodity Exchange Act generally requires brokers in the derivatives sector to register with the CFTC. “Intermediary” means a person or firm acting on behalf of another person in connection with futures, swaps or options trading. Depending on the nature of its activities, an agent may also be subject to a variety of financial, disclosure, reporting and record keeping requirements. There are some exceptions or exemptions where an agent does not require registration. However, entities on the RED List do not meet the criteria for an exception or exemption.
The CFTC distributes the RED List to other regulators, consumer groups, and industry participants. It also gives out to financial industry partners, including self-regulatory bodies, exchanges, and industry associations. It also complements the registration information provided by the National Futures Association. The public is a great source of tips for organizations that should be on the RED List. The CFTC accepts these tips via email.
