PaxForex was banned from operating in the US late last month for offering illegal leveraged transactions in cryptocurrencies and commodities.
July 12, 2021, | AtoZ Markets – The US Commodity Futures Trading Commission (CFTC) announced last Friday that the US Federal Court has imposed a ban and a fine on PaxForex, a forex broker licensed by Saint Vincent and the Grenadines.
Judge David Hittner of the US District Court for the Southern District of Texas ruled that the trading platform illegally offers clients to trade cryptocurrencies and commodities using leveraged funds (note: margin trading).
The absentee decision orders PaxForex to pay a civil fine of $374,864. Moreover, the platform is permanently banned from attracting and registering American clients.
“The court decision, which came into force on June 30, 2021, stems from a CFTC Complaint filed on September 24, 2020, in which PaxForex is accused of illegal, OTC transactions with Ether, Litecoin and Bitcoin cryptocurrencies, as well as with precious metals and foreign currencies. Retail clients carried out margin trading, where the platform acted as a futures intermediary (FCM), without having the registration and permission of the CFTC,” the department commented.
In addition, a complaint filed with the court alleges that PaxForex was engaged in “illegal” transactions in precious metals such as gold, silver, as well as cryptocurrencies, including (BTC) and Ethereum (ETH). “The defendant did not conduct these transactions in accordance with the rules of the trading board, which was designated or registered with the CFTC as a contract market,” the regulator said.
Violation of the commodity exchange law
In addition, the CFTC noted that the forex broker, through its employees and agents, accepts or initiates trade orders to buy or sell currencies and commodities, and also accepts money and cryptocurrencies.
“The CFTC urges the public to verify a company’s registration with the CFTC before investing. Money should not be transferred to unregistered companies,” the department warned.
The CFTC also recently filed a civil lawsuit against Troy Manson and his company ZTegrity Inc for allegedly being involved in currency trading fraud.
Think we missed something? Let us know in the comment section below.