The Commodity Futures Trading Commission (CFTC), recently added 34 new unregistered foreign entrants to the ‘RED’ list. The unregistered foreign companies include Algobit, Cent projects, Alis capital, Closeoption, CryptoBO to name a few.
A firm is added to the RED List when the CFTC determines that it is not registered with the commission and it is operating in a capacity that requires registration.
The Commodities Exchange Act requires an intermediary to register with the CFTC. An intermediary would be subjected to various financial, disclosure, reporting and record keeping requirements depending on the nature of activities.
CFTC commissioner Kristin Johnson, stated, “Because they are not registered with the CFTC, customers engaged in transactions with these entities may not receive the benefit of the customer protections, safeguards and guardrails long-adopted and deeply embedded in the CFTC’s oversight of the markets.”
The RED list is moved throughout the financial industry partners which includes regulators, consumer groups, industry participants, self-regulatory organisations, exchanges, and industry associations. It is complemented by the registration information the National Futures Association (NFA) provides.
CFTC acts as a catalyst on companies which have seen a huge number of fraud complaints over their products or markets. Their addition to the RED list makes sure that the transactions involving U.S citizens won’t be exposed to risks and frauds with those unregistered entities who operate across borders without any oversight.
Also read: CFTC Sues Gemini for False Statements About Bitcoin Futures Contract
