CFTC imposes $1.5 million fine against Bitfinex over illegal transactions

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Bitfinex

The Commodity Futures Trading Commission (CFTC) ordered Bitfinex to pay a penalty of $1.5 million for offering and executing illegal off-exchange financed retail commodity transactions in cryptocurrencies with U.S. persons.

Bitfinex is a cryptocurrency trading platform. It is a wholly-owned subsidiary of iFinex, which was incorporated in the British Virgin Islands.  Bitfinex and its parent company were never registered with the CFTC.

Allegations against Bitfinex

In its Order, the CFTC alleged that Bitfinex violated the Commodity Exchange Act (CEA) and the Commission’s regulations in connection with the operations of the cryptocurrency trading platform.

The Commission alleged that the cryptocurrency trading platform’s transactions and operations are illegal since it was never registered as a futures commission merchant (FCM).

Additionally, the CFTC alleged that Bitfinex violated its 2016 Order which required the cryptocurrency trading platform to stop violating Sections 4(a) and 4d of the CEA.  The 2016 Order also required the cryptocurrency trading platform to pay a penalty of $75,000 for its violations.