The SEC charges XBT with selling unregistered Bitcoin Funded Swap on its platform. Also, the US regulators pointed out that the Swiss Securities company failed to register as a futures commission merchant (FCM).
01 November 2019, AtoZMarkets – The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) today initiated and settled actions against Switzerland-headquartered First Global Credit (FGC). US regulators are charging XBT Corp. Because it offers asset-backed securities on a platform. That breaks US regulatory compliance.
SEC Charges Unregistered Exchange XBT
The SEC also charged XBT Corp. for selling securities on an unregistered exchange. And that is also for failing to register as a commission futures dealer (FCM). The order requires the FGC to pay a civil monetary penalty of $ 100,000. And it has to also disgorges the gains received as part of its violations and to cease from future violations, according to the CFTC.
The First Global Credit service allows investors to finance a margin account with bitcoins. And then it opens leveraged positions in equities, multiple global equity indices, and ETFs. The system ran from March 2016 to July 2017. And it allegedly broke federal securities laws in connection with the sale of securities-based swaps funded with Bitcoin. Only Bitcoin was used to finance the FGC accounts. Once funded, individuals could then trade on equity derivatives, commodities, or currency pairs.
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Regulators Seize The Domain of First Global Credit
In the absence of certain exceptions, which do not apply to the FGC, US law requires that securities swap offers should registered with the SEC. And that transactions be executed on a registered national stock exchange. Similarly, FGC acted as a broker in CFDs. The company violated federal securities laws.
US regulators have seized the FGC domain of First Global Credit. Previously, the CFTC explains that the company had dedicated a separate page on its website to allow investors to Trade Futures Using bitcoin as collateral margin. Since customers keep their bitcoins (and the growth advantage). FGC arranges a loan to cover the margin required to place the trade. FGC settled in bitcoin to trade on the trading platform.
The SEC also charged the FGC with operating a hidden trading desk since the company, either directly or through its wholly-owned subsidiary. That was the counterparty for each transaction with its account holders.
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