CFTC starts legal action against retail FX broker Tallinex

Maria Nikolova

CFTC seeks permanent injunction, civil monetary penalties and other forms of relief for defendants.

Offering retail Forex services to US clients without having the necessary registration with the US regulators is a law violation and a broker may be prosecuted for it. The United States Commodity Futures Trading Commission (CFTC) has just demonstrated again that it will go after offenders over such law breaches.

On May 30, 2017, the CFTC filed a case against retail Forex broker Tallinex at the Utah District Court. The case captioned Commodity Futures Trading Commission v. Tallinex et al (2:17-cv-00483) is assigned to Judge David Nuffer. The official cause for the legal action is alleged violation of Federal Commodity Exchange Regulations.

The CFTC is seeking permanent injunction, civil monetary penalties and other forms of relief for defendants.

According to Law360, the US regulator alleges that Tallinex took at least $1.5 million from US investors by conducting retail foreign currency trades without having the necessary registration.

The CFTC says that from September 2012 and to at least September 2016, Tallinex solicited and accepted Forex orders from customers in the United States without registering as a retail foreign exchange dealer with the Commission. Thus, the broker is alleged of having violated the Commodity Exchange Act and agency rules.

Tallinex’s website displays a disclaimer saying that the company does not provide retail Forex services to US residents. The contact form shows the broker is registered in St Vincent and the Grenadines.

Under the Commodity Exchange Act (CEA) and US CFTC regulations, since October 18, 2010, an entity that solicits or accepts orders from US customers in connection with forex transactions must register with the CFTC and comply with rules and regulations, including (inter alia) minimum capital requirements and record-keeping. Putting it otherwise, even an overseas company that wants to target US residents should have the necessary registration with US regulators.

The CFTC has demonstrated several times how it can punish violators of this rule. For example, in February 2013, the CFTC filed a complaint in Court against Halifax Investment Services of Sydney, Australia for soliciting and accepting FX orders from US customers without registering with the CFTC as required.

Read this next

Retail FX

Malaysia regulator exposes OctaFX clone, shady FB profiles

Malaysia’s financial regulator today warned online investors about the risks of following investment tips made on social-media platforms.

Digital Assets

Crypto trading volume spikes at Swiss bourse amid FTX collapse

The shockwaves from the historic collapse of Sam Bankman-Fried’s crypto empire are still being felt across the industry, but some trading venues are actually doing better because of it.

Executive Moves

CMC Markets adds Camilla Boldracchi to institutional sales

UK’s biggest spread better, CMC Markets has promoted Camilla Boldracchi to take on an expanded role within its institutional sales desk.

Institutional FX

FXSpotStream reports $1.48 trillion in monthly volume for November

FXSpotStream’s trading venue, the aggregator service of LiquidityMatch LLC, reported its operational metrics for November 2022, which moved higher on a yearly basis but reflected weak performance across executed trade volumes when weighed against the figures of the prior month.

Retail FX

Interactive Brokers’ client activity drops 30% YoY

Interactive Brokers LLC (NASDAQ:IBKR) saw 1.95 million daily average revenue trades, or DARTS, in November 2022 compared to 1.96 million transactions in the prior month.

Digital Assets

The rise of Crypto ETPs in traditional exchanges as crypto winter deepens

Institutional investors are increasingly looking at traditional regulated exchanges as their first route into digital assets amid market turmoil caused by the crypto winter and the collapse of several big names within the space, including FTX. Acuiti and Eurex surveyed 191 buy and sell-side firms on their views of the digital assets markets in order […]

Digital Assets

TP ICAP’s crypto arm receives FCA’s go-ahead

UK interdealer broker TP ICAP has received a regulatory go-ahead to launch its cryptocurrency services in the UK. The bid shows that the recent collapse of FTX exchange has done little to damp the interest of big names in running their own crypto business.

Industry News

Coin Signals founder to pay $2,847,743 after prison sentence over crypto Ponzi scam

The U. S. District Court for the Southern District of New York has ordered Jeremy Spence, founder of Coin Signals, to pay $2,847,743 in restitution to victims of a fraudulent virtual currency scheme.

Digital Assets

CME Group goes DeFi: Reference rates and real-time indices of Aave, Curve, Synthetix

“These rates are designed to provide traders, institutions and other users transparency and price discovery across a much broader range of tokens, allowing them to confidently and more accurately value cryptocurrency sector specific portfolios and manage price risk around various blockchain-based projects.”

<