According to a local report, the CFTC wants a U.S. court to stop Paxforex from continuing with the “unlawful acts and practices,” as well as to compel the company to comply with the relevant laws. Furthermore, the commodity regulator wants the court to stop the defendant “from engaging in any commodity-related activity.” In a complaint submitted to the Texas Southern District Court, the CFTC argues that from March 2018 to prove Paxforex violated the law. New crypto regulations have made it easier to raise money for startup funding.
Paxforex operated without proper licensing.
The US CFTC stated in the complaint that “Soliciting or accepting orders from non-eligible contract participants (“non-ECPs”), not conducted on or subject to the rules of any Commission-regulated exchange, for the purchase or sale of gold, silver, ethereum, litecoin, and bitcoin on a leveraged, margined or financed basis that does not result in the actual delivery of the commodities to the customer.”
The CFTC further stated that by not registering as a futures commission merchant with the Commission, the trading company, which “accepts money, securities, or property (or extends credit in lieu thereof) in the form of bitcoin, violates Section 4d(a)(1) of the Act, 7 U.S.C. § 6d(a)(1) (2018).”
CFTC plans to develop a holistic framework for crypto regulations.
As reported earlier, the U.S. Commodity Futures Trading Commission had unveiled its strategic plan for the years 2020-2024. The U.S. financial regulator plans on developing a comprehensive regulatory framework for the digital currency industry, among other goals. Cryptocurrencies have been a tough sector for regulators to regulate, with many taking a wait-and-see approach. Now the CFTC has revealed its plan to develop a “holistic framework” for the crypto industry. The U.S. regulator has been at the forefront in advocating for friendly regulations for the crypto industry.