Offshore online trading platform 1pool, CEO Patrick Brunner settle CFTC charges
The defendants agree to pay disgorgement of $246,000, as well as a civil monetary penalty of $175,000.
1pool Ltd, an online trading platform registered in the Republic of Marshall Islands, and its CEO Patrick Brunner have settled charges brought by the United States Commodity Futures Trading Commission (CFTC).
The relevant Consent Order has been signed earlier this week by Judge Trevor N. McFadden of the Columbia District Court.
Let’s recall that the CFTC filed a civil enforcement action in the U.S. District Court for the District of Columbia against 1pool Ltd. (1pool), and its chief executive officer and owner, Patrick Brunner of Austria, in September 2018. The CFTC’s Complaint charged the defendants with engaging in unlawful retail commodity transactions, failing to register as a Futures Commission Merchant (FCM), and supervisory violations for failing to implement procedures to prevent money laundering as required under federal laws and regulations.
According to the Complaint, from at least February 2016 through the present, the defendants offered or engaged in unlawful retail commodity transactions in the form of CFDs that had as underlying assets commodities such as gold and West Texas Intermediate crude oil. The defendants did not conduct these transactions on or subject to the rules of any board of trade that has been designated or registered by the CFTC as a contract market, as required by the Commodity Exchange Act (CEA).
The Complaint further alleges that 1pool, through Brunner and its other employees and agents, acted as an FCM by soliciting or accepting orders for retail commodity transactions; acted as a counterparty to these transactions; and in connection with these activities, accepted money, securities, or property (or extended credit in lieu thereof) in the form of bitcoin to margin any resulting trades or contracts that result or may result therefrom. Despite acting as an FCM, the defendants failed to register with the Commission as an FCM as required and failed to implement an adequate supervisory system as such registration requires.
The defendants also failed to diligently supervise by failing to implement an adequate know-your-customer and customer identification program (KYC/CIP).
Under the Consent Order, signed by Judge Trevor N. McFadden of the Columbia District Court on Monday this week, the defendants agree to pay disgorgement of $246,000, as well as a civil monetary penalty of $175,000. In addition, the defendants will have to pay to all known US customers bitcoin held by the defendants in the US customer accounts.
The defendants are permanently restrained and prohibited from conducting any business in the United States for the purpose of soliciting orders, or otherwise dealing in, retail commodity transactions. They are also prohibited from failing to implement an adequate supervisory system including KYC/CIP procedures.
