CFTC Fines Falcon Labs for Unregistered Digital Asset Services

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Jul 10, 2023
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”Regulation”

CFTC Fines Falcon Labs for Unregistered Digital Asset Services



The Commodity Futures Trading Commission (CFTC) has issued an injunction to sue and prosecute Falcon Labs, Ltd., a Seychelles-based company, on the grounds that it is not a futures commission trader (FCM) in violation of the law.

This action marks the first time the CFTC has charged an unregistered FCM for helping people access digital asset exchanges. The company is now banned from carrying out unregistered FCM activities and is expected to pay large financial penalties.


Falcon Labs Unregistered Activities and Penalties


Falcon Labs was caught soliciting and accepting orders for digital asset derivatives from US customers between October 2021 and March 2023. As an intermediary, the company allowed customers to trade on different digital asset exchanges by creating master data without the need to provide customer-identifying information. accounts and subaccounts. Such an arrangement made it possible for Falcon Laboratories to operate without mandatory FCM registration.

As a result, the CFTC’s order forces Falcon Labs to cease its unregistered activities and pay financial penalties. As a result, the company must pay $1,179,008 in damages and $589,504 in fines.


The reduced penalty is due to Falcon Labs’ full cooperation with the CFTC’s Enforcement Division. Enforcement Director Ian McGinley said the CFTC will protect market integrity and charge fees to all entities, whether exchanges or brokers, that provide unregistered digital asset services.


CFTC Enforcement and Cooperation


The CFTC’s enforcement action against Falcon Labs is part of its overall policy to regulate digital asset markets. The commission’s decision to charge an agent is a major step in its ongoing fight to enforce registration requirements. The CFTC expects Falcon Labs’ collaboration and improvement efforts will inspire other non-compliant digital asset brokers to come forward.


Falcon Labs received a net fee of $1,179,008 from clients trading digital asset derivatives from October 2021 through March 2023. Following the CFTC’s complaint against Binance and other related entities for the same reasons, Falcon Labs voluntarily improved its controls for identifying customer locations. This proactive measure was taken into account in reducing the fine.

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Kelvin is a distinguished author specializing in crypto and finance, with a bachelor’s degree in Actuarial Science. Known for her sharp analysis and insightful content, she is fluent in English and specializes in comprehensive research and on-time delivery.





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”Regulation”

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