Texas court bans BTC platform PaxForex, imposes $374K penalty
A U.S. federal court has imposed a permanent trading and solicitation ban on PaxForex, a BTC and ETH trading platform. The company is accused of engaging in illegal, off-exchange transactions in these digital currencies as well as foreign currencies and precious metals without registering with the regulators.
The U.S. Commodity Futures Trading Commission (CFTC) announced recently that the Southern District of Texas had entered a default judgment against Laino Group Limited, which trades as PaxForex.
“The order imposes permanent trading, solicitation, and registration bans against PaxForex entering into transactions involving commodity interests and prohibits it from violating provisions of the Commodity Exchange Act (CEA), as charged,” the CFTC stated.
In addition to the bans, PaxForex must also pay a civil monetary penalty of $374,864.
The CFTC first filed a complaint against the St. Vincent and the Grenadines company in September 2020. At the time, the watchdog accused PaxForex of engaging in illegal transactions in BTC, Litecoin and Ether, as well as in precious metals and foreign currency.
It allegedly offered its clients, usually retail traders, these products on a leveraged and margined basis. In so doing, it acted as a futures commission merchant without registering with the CFTC as required.
The CFTC stated, “The order finds that from at least March 2018 through the present, PaxForex offered or engaged in unlawful retail commodity transactions in Ether, Litecoin, Bitcoin, gold, and silver. The defendant violated the CEA by failing to conduct these transactions subject to the rules of a board of trade that had been designated or registered with the CFTC as a contract market.”
On its website, PaxForex claims to offer trading in forex, stocks, indices and spot metals. On its disclaimer, it clearly states, “The information on this website is not intended to be addressed to the public of Iraq, Syria, North Korea, U.S. citizens, or any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.”
Despite the warning, it would seem the platform offered its services to U.S. residents and will now have to atone for it.
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