The US Commodity Futures Trading Commission (CFTC) has ordered Seychelles-registered cryptocurrency broker Falcon Labs to pay nearly $2 million to settle regulatory violations.
CFTC says Falcon Labs failed to properly register with the regulator and will, as a result, pay a total of $1,768,512 in the regulator’s first action against an unregistered futures commission merchant (FCM).
“Falcon Labs is ordered to cease acting as an unregistered FCM by allowing US citizens access to digital asset derivatives trading platforms. The order also requires Falcon Labs to pay $1,179,008 in disgorgement and a civil penalty of $589,504.”
According to the CFTC, the crypto brokerage firm “solicited or accepted orders” from US-based clients from around October 2021 until at least March 27, 2023.
“During this period, Falcon Labs acted as an intermediary facilitating client trading on various digital asset exchanges, including institutional clients in the US. Falcon Labs provided its customers with direct access to exchanges by first creating a main account in their own name and then corresponding sub-accounts. The exchanges generally did not require, and Falcon Labs generally did not provide, customer identifying information for the sub-account holders.”
Falcon Labs’ settlement comes just over a week after CFTC Chairman Rostin Behnam warned that the cryptocurrency industry “will likely see a new cycle of enforcement actions in the next six to 18 months or six to 24 months.”
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