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CFTC: Federal Court Permanently Bans And Imposes An Over $300,000 Penalty Against Foreign Trading Platform For Offering Illegal Leveraged Transactions In Ether, Litecoin, Bitcoin And Precious Metals

Date 09/07/2021

The Commodity Futures Trading Commission today announced that Judge David Hittner of the U.S. District Court for the Southern District of Texas entered a default judgment against Laino Group Limited d/b/a PaxForex (PaxForex) of St. Vincent and the Grenadines. The order imposes permanent trading, solicitation, and registration bans against PaxForex entering into transactions involving commodity interests and prohibits it from violating provisions of the Commodity Exchange Act (CEA), as charged. The order also requires the defendant to pay a civil monetary penalty of $374,864.


Case Background

The order, entered on June 30, 2021, stems from a CFTC complaint filed on September 24, 2020, that charged PaxForex with engaging in illegal, off-exchange transactions in Ether, Litecoin and Bitcoin, in addition to precious metals and foreign currency, with retail customers on a leveraged, margined, or financed basis and acting as a futures commission merchant (FCM) without CFTC registration as required. [See CFTC Press Release No. 8256-20

The order finds that from at least March 2018 through the present, PaxForex offered or engaged in unlawful retail commodity transactions in Ether, Litecoin, Bitcoin, gold, and silver. The defendant violated the CEA by failing to conduct these transactions subject to the rules of a board of trade that had been designated or registered with the CFTC as a contract market.

The order further finds that PaxForex, through its employees and agents, acted as an FCM by soliciting or accepting orders for retail commodity and foreign currency transactions and acting as a counterparty for these transactions; and in connection with these activities, it accepted money, securities, or property (or extended credit in lieu thereof) in the form of Bitcoin and other assets to margin trades or contracts that resulted or may have resulted.

The CFTC strongly urges the public to verify a company’s registration with the CFTC before committing funds. A customer should be wary of providing funds to an unregistered entity. A company’s or individual’s registration status can be found using NFA BASIC.

The CFTC thanks the U.S. Attorney’s Office for the Southern District of Texas and the Federal Bureau of Investigation for their assistance in this matter.

Division of Enforcement staff members responsible for this action are Harry E. Wedewer, Chris Giglio, Candice Aloisi, Mary Lutz, Lenel Hickson, Jr., and Manal M. Sultan. Office of Information Technology staff members Devon Malinowski and Salma Mack also provided assistance in this matter.

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