Individuals may be personally liable if crypto trading platforms are unable to identify US customers and screen, monitor and report transactions with participants in accordance with CFTC and FinCEN rules.
The co-founder of Crypto is personally responsible for the failure to register the Digital Asset Derivatives Platform and fail to comply with the required requirements.
These individuals are subject to millions of civil penalties for violating the Commodity Derivatives Act and operating unregistered futures fees.
Commodity Futures Trading Commission (CFTC) Recently announced A U.S. District Court in the Southern District of New York has issued a consent order for a personal civil fine of $ 30 million to the three co-founders of a cryptocurrency derivative trading platform. This is not the first time the platform has been cited.
The court move emphasizes how important regulatory compliance is to the founders of fintech companies, and they are responsible for ensuring that U.S. operations are conducted with careful consideration of regulatory systems and compliance requirements. Emphasizes how to bear personally. These responsibilities include implementing procedures to identify Americans using financial services, products, and platforms.
A $ 30 million civil punishment paid by the three co-founders, the platform performs an important aspect of business from the United States, accepts orders and funds from U.S. customers, and through unregistered entities, The result of trading cryptocurrencies and derivatives without complying with the applicable customer. Requirements for identification, screening, regulatory compliance, and consumer protection.
The personal responsibility that flows to the three co-founders is the Commodity Exchange Act (CEA) by acting as a Futures Commission Merchant (FCM) without CFTC registration, implementing the Customer Information Program (CIP), and knowing the customer. ) Due to a platform violation. A procedure that allows the identification of Americans using the (KYC) platform. Further failures included a combination of Financial Crimes Enforcement Network (FinCEN) and CFTC rule violations that required the implementation of appropriate Money Laundering Prevention (AML) and customer identification programs.
These personal civil penalties appointed by the founders of the platform underscore the most important regulatory analysis in the context of providing digital assets, cryptocurrencies, and cryptocurrency services. This trading platform was cited not only for unregistered derivative products, but also for failing to implement the appropriate BSA / AML program for related remittance activities. The implementation of penalties and co-discovery between CFTC and FinCEN highlights a complex framework of regulatory requirements that apply to digital assets and FinTech products.
May consent order 2021 CFTC Consent Order Operating and simultaneously operating a company’s unregistered trading platform that violates CEA and CFTC regulations Enforcement measures According to FinCEN for violations of the Bank Secrecy Act (BSA) and FinCEN regulations. The 2021 fine totaled over $ 100 million as a civil fine payable by the trading platform itself.
Gretchen Lowe, Deputy Executive Director of the CFTC, commented: “Persons managing cryptocurrency derivative trading platforms doing business in the United States need to ensure that the platform complies with applicable federal commodity laws, including CFTC registration and regulatory requirements such as Know-Your-Customer and Anti. -There are money laundering regulations. “
Regulators are taking a fine-grained approach to address concerns about money laundering and terrorist financing. As FinCEN Deputy Director Anna Lou Tirol commented in 2021, “It is important that the platform builds financial integrity from the beginning and that financial innovation and opportunities are protected from vulnerabilities.”
These orders underscore the high amount that founders may pay when they fail to meet their regulatory obligations by allowing unlicensed activities and unprotected persons on their platforms. The founders of Fintech need to carefully consider this recent announcement to ensure that they meet their regulatory obligations in doing business in the United States.