Falcon Labs Settles with CFTC in Landmark Case Over Unregistered Status
The Commodity Futures Trading Commission (CFTC) has reached a settlement with Falcon Labs, Ltd., a Seychelles-based entity, for operating as an unregistered futures commission merchant (FCM) and facilitating access to digital asset exchanges without proper registration.
.@CFTC Issues Order Against #Crypto Prime Brokerage Firm for Illegally Providing U.S. Customers Access to Digital Asset Derivatives Trading Platforms: https://t.co/UeKHaNsXzi
— CFTC (@CFTC) May 13, 2024
Under the settlement terms, Falcon Labs must cease acting as an unregistered FCM, particularly in providing US individuals access to digital asset derivatives trading platforms. Additionally, Falcon Labs has been ordered to pay $1,179,008 in disgorgement and a civil monetary penalty of $589,504.
The reduced penalty reflects Falcon Labs’ extensive cooperation with the CFTC’s Division of Enforcement throughout the investigative process.
Ian McGinley, the CFTC’s Director of Enforcement, emphasized the agency’s unwavering commitment to upholding integrity in derivatives markets, particularly in the digital asset space. He said,
“The CFTC’s enforcement program has made clear it will not tolerate digital asset exchanges that fail to register with the CFTC or comply with the agency’s rules that maintain integrity in the derivatives markets.”
McGinley highlighted the CFTC’s determination to hold accountable any entities, whether exchanges or intermediaries, that provide access to digital asset products and services without appropriate registration.
As an intermediary, Falcon Labs facilitated customer trading on various digital asset exchanges, including institutional customers within the US. The company provided direct access to exchanges by creating main accounts in its
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