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CFTC Charges Firm With Illegally Providing Leveraged Trading of Crypto, Gold

A Caribbean-based firm is in hot water with the CFTC for allegedly allowing U.S. retail investors to partake in leveraged trading of cryptocurrencies and precious metals.

By Daniel Palmer
AccessTimeIconSep 28, 2020 at 2:52 p.m. UTC
Updated Sep 14, 2021 at 10:01 a.m. UTC
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A company based in St. Vincent and the Grenadines is in hot water with the Commodity Futures Trading Commission (CFTC) for allegedly allowing U.S. retail investors to partake in leveraged trading of cryptocurrencies and precious metals.

  • The firm, Laino Group Limited (trading as PaxForex), is accused of illegally conducting retail commodity transactions and not having registered as a futures commission merchant (FCM).  
  • From around 2018 on, PaxForex is said to have unlawfully traded bitcoin, ether, litecoin, gold, and silver without conducting transactions through a registered contract market, violating the Commodity Exchange Act.
  • The company is further alleged to have acted as an FCM, with staff and agents soliciting and taking orders for retail commodity transactions, without being registered as such with the CFTC.
  •  “This action shows the CFTC’s continued commitment to ensuring that entities offering leveraged, retail transactions within our jurisdiction – including those involving digital assets – register with the CFTC,” according to James McDonald, CFTC Division of Enforcement director. 
  • The commission is seeking disgorgement of "ill-gotten gains," penalties and restitution, as well as permanent registration and trading bans.
  • A civil enforcement action was filed Monday at the U.S. District Court for the Southern District of Texas.

Also read: OCC's First Issued Guidance for Stablecoins Brings More Questions

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