Bitfinex settled charges that it offered illegal off-exchange financed retail commodities trading, as well as failed to register as a futures commission merchant. Bitfinex did not admit or deny the CFTC findings, the agency said today.
According to an order published today by the CFTC, the issues arose owing to how Bitfinex held functional control over funds tied to leveraged or margin trading on the platform. The CFTC said that because no actual commodities were delivered by Bitfinex to its customers – the private keys tied to the applicable bitcoins remained under the exchange’s control – it was in violation of the Commodity Exchange Act.
Bitfinex will pay $75,000 in civil penalties, according to the order, and has moved to change its internal policies and avoid further violations of the Commodity Exchange Act.
The CFTC said a statement:
“The Order finds that from April 2013 to at least February 2016, Bitfinex permitted users to borrow funds from other users on the platform in order to trade bitcoins on a leveraged, margined,