CFTC Fines Kraken $1.25 Million for Unregistered Retail Margin Trading

The U.S. Commodity Futures Trading Commission (CFTC) fined the Kraken exchange for offering unregistered retail margin trading of digital assets, including Bitcoin.

THE LATEST: Commissioner Stump’s concurring statement on enforcement action against Payward Ventures, Inc. (d/b/a Kraken). Read it here: https://t.co/yo7qiUOMS0

— CFTC (@CFTC) September 28, 2021

Under the order, in addition to paying a civil penalty of $1.25 million, the platform must “cease and desist from further violations of the Commodity Exchange Act as charged.”

According to the regulator, from roughly June 2020 through July 2021 Kraken offered retail margin trading to U.S. clients. These transactions were illegal because they were supposed to be conducted on designated contract markets (DCMs).

In addition, the exchange operated without registering as a futures commission merchant (FCM), the Commission noted.

“Our actions are part of the CFTC’s efforts to protect US customers. Trading of digital assets on margin, with borrowed funds or financing offered to retail customers, must occur on properly registered and regulated exchanges in compliance with all applicable laws and rules,” said Acting Director of Enforcement Vincent McGonagle.

Coinbase filed an application for FCM status.

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