CFTC fines XBT Corp over failure to register as futures commission merchant

Maria Nikolova

XBT Corp. SARL d/b/a First Global Credit will have to pay a $100,000 civil monetary penalty, disgorge illegally generated gains, and to cease and desist from future violations of the Commodity Exchange Act.

The United States Commodity Futures Trading Commission (CFTC) today announces the issuance of an order filing and settling charges against Switzerland-based XBT Corp. SARL doing business as First Global Credit (FGC) for its failure to register with the CFTC as a futures commission merchant (FCM).

The order requires the company to pay a $100,000 civil monetary penalty and disgorge gains received in connection with its violations, and to cease and desist from future violations of the Commodity Exchange Act (CEA). In the order, the Commission recognizes that FGC’s civil monetary penalty in this matter was substantially reduced in light of FGC’s cooperation and remediation.

According to the CFTC’s findings, from March 2016 to July 2017, FGC acted as a futures commission merchant by soliciting or accepting orders for futures from US customers and by accepting Bitcoin to margin their trades without being registered with the Commission. FGC’s website and trading platform solicited or accepted orders from U.S. customers for the purchase and sale of commodity futures listed on the Chicago Mercantile Exchange Globex trading platform.

FGC established a separate page on its website to assist customers by instructing them how to “Trade Futures Using bitcoin as collateral margin.” FGC’s website further stated, “Since you retain your bitcoins (and the growth benefit) we arrange a loan to cover the margin needed to place the trade.” Trades on FGC’s trading platform were settled in bitcoin.

FGC violated Section 4d(a)(1) of the CEA which makes it unlawful for any person to be an FCM without registering with the CFTC.

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