A complaint has been submitted by the US Commodity Futures Trading Commission (CFTC) in the Texas Southern District Court against Laino Group Limited d/b/a PaxForex for providing unauthorized services to the customers.
The filing notified that the PaxForex platform is used for trading different commodities which include foreign currencies, precious metals and some of the digital assets like ether, litecoin and bitcoin.
PaxForex Trading Unregistered Commodities
The CFTC, further in its complaint, has mentioned that without registering the trading commodities with the US agency, Paxforex started accepting orders for leveraged, margined or financed retail.
The government agency has alleged that since March 2018, the trading platform has been operating its business in the US. Since then, it has been accepting orders from non-eligible contract participants, it even has started purchasing or selling commodities that actually were not delivered to the customers. By doing so, PaxForex has been violating Section 4(a) of the Commodity Exchange Act 7 U.S.C. § 6(a) (2018).
The complaint submitted in the Texas Southern District Court indicated that PaxForex did not register itself with the Commission as a futures commission merchant (FCM) or in connection with forex and retail commodity transactions.
However, the company started accepting money, security or property from the customers, but that too in the form of Bitcoin or other digital assets.
Violation of Different Sections
As PaxForex started accepting commodities in order to margin, guarantee or secure trades, but by doing so, PaxForex violated Section 4d(a) (1) of the Act, 7 US § 6d(a)(1) (2018).
Initially, the CFTC has been trying to outlaw the unlawful activities of the company so that, it complies with the Act. Later, the federal agency would outlaw the defendant so that in the future it does not get involved in activities related to commodity.
Also, the CFTC would be receiving the civil monetary penalties and remedial ancillary relief from PaxForex.