The Commodity Futures Trading Commission (CFTC) has penalized Falcon Labs, a Seychelles-based crypto brokerage firm, for operating as an unregistered futures commission merchant (FCM) in the US.
Unregistered Activities
From October 2021 to March 2023, Falcon Labs facilitated US customers’ access to digital asset derivatives trading platforms without registering with the CFTC. As an intermediary, Falcon Labs created main and sub-accounts for customers to trade on various exchanges.
CFTC Enforcement
The CFTC has ordered Falcon Labs to:
- Cease acting as an unregistered FCM
- Pay a disgorgement of $1.7 million
- Pay a civil penalty of $589,000
CFTC’s Stance
The CFTC’s Director of Enforcement, Ian McGinley, emphasized the agency’s commitment to ensuring compliance and protecting the integrity of derivatives markets. He stated that the CFTC will not tolerate unregistered entities providing access to digital asset products and services.
Increased Controls
Following the CFTC’s complaint against Binance in 2023, Falcon Labs reportedly implemented stricter controls to identify customer locations.
