CFTC Adds 34 Crypto Entities to the RED List

Uno
CFTC

The United States Commodity Futures Trading Commission (CFTC) has added 34 crypto entities to its Registration Deficient (RED) List, according to a notice published on July 14.

Some of the affected firms include CryptoSphereFX, Direct Cryptos, Bitpay Options, FX-Cryptex, and others.

Per the notice, CFTC adds firms that have failed to register their operations involving foreign exchange (Forex) or binary trading options with the authorities.

Part of the notice reads:

A firm is added to the RED List when the CFTC determines, from investigative leads and public inquiries, that it is not registered with the Commission and appears to be acting in a capacity that requires registration, such as trading binary options, foreign currency (forex), or other products. The Commodity Exchange Act generally requires intermediaries in the derivatives industry to register with the CFTC. 

Meanwhile, firms that have been added to the RED list have not necessarily broken any law; however, the notice acts as a warning to players in the industry to be careful when dealing with such firms.

Over 200 firms have now been added to the CFTC RED list.

CFTC’s Crypto Regulation Drive

CFTC’s effort to regulate the crypto industry has taken a step forward since Senators Kirsten Gillibrand and Cynthia Lummis introduced a new bipartisan bill that places the industry under its purview.

Rostin Behnam CFTC’s chairman had said the commission is prepared to regulate the industry.

Per Behnam, “Markets are markets, whether it’s derivatives or equities or fixed income.… There’s always a natural relationship between . . . derivatives generally and cash markets.”

Since then, the Commission has filed a lawsuit against Mirror Trading International (MTI) Proprietary Limited over the orchestration of a Bitcoin fraud scheme.

Meanwhile, the Security and Exchange Commission (SEC) chairman Gary Gensler is seeking cooperation between both financial regulators to regulate the crypto industry effectively.

According to Gensler, the industry needs “one rule book” to regulate the activities of players in the industry.

US Continues Crypto Regulation Moves

Other federal agencies like the US Treasury Department are also stepping up activities to regulate the crypto industry.

Treasury Secretary Janet Yellen recently met with Japanese financial authorities to discuss how both countries can collaborate to regulate the crypto industry.

Since Secretary Yellen’s assumption of office, she has extensively spoken about the need to regulate stablecoins. The recent collapse of the Terra ecosystem has increased her evangelism for the industry to be properly regulated.