The Commodity Futures Trading Commission (CFTC) has filed charges against four entities—cryptoiminerstrade.com, Expert Stocks Zone, FalconForexBot, and swiftminingexpert.com—accusing them of operating as unregistered futures commission merchants (FCMs). The CFTC’s complaints seek cease-and-desist orders to prevent further violations of the Commodity Exchange Act.
The four platforms, allegedly based in New York, Los Angeles, and Beaumont, Texas, claim to offer binary options on commodities like foreign currencies and cryptocurrencies, including Bitcoin. They also falsely claimed to be regulated by the CFTC and capable of handling client funds, the Commission alleges.
The CFTC cautioned the public to verify the registration of entities before committing funds, stressing that unregistered firms pose significant risks. The charges are part of a larger enforcement sweep targeting unregistered entities in the derivatives and crypto markets.
Details of the Entities Charged:
- cryptoiminerstrade.com – Allegedly operating from New York and Los Angeles, this platform claims to be one of the leading providers of binary options, Forex, and spreads in the U.S. It advertises itself as CFTC-regulated and capable of managing client funds.
- Expert Stocks Zone – Allegedly based in New York, this platform offers binary options based on commodities and cryptocurrencies. It touts awards for prioritizing client fund security and claims to be regulated by the CFTC.
- FalconForexBot – Allegedly operating from New York and Beaumont, Texas, FalconForexBot presents itself as a premier platform for binary options, Forex, and cryptocurrency trades. It claims that customer fund security is its top priority and further asserts CFTC regulation.
- swiftminingexpert.com – Allegedly based in New York and Los Angeles, this platform makes similar claims about its position in the U.S. market for binary options, emphasizing its ability to manage customer funds and being regulated by the CFTC.
Commissioner Mersinger concerned over insufficient evidence
CFTC Commissioner Summer K. Mersinger issued a dissenting statement, objecting to how the charges were pursued. Mersinger expressed concern over the CFTC’s decision to use administrative proceedings instead of taking the cases to federal court. She argued that there was insufficient evidence to support the claim that these entities acted as FCMs, particularly regarding whether they accepted money or property to secure trades, a key element of the FCM definition.
Mersinger referenced the recent Supreme Court ruling in SEC v. Jarkesy, which raised the level of scrutiny federal agencies must apply when using administrative proceedings. She emphasized that while she supports efforts to prevent false claims of CFTC registration, the unregistered FCM charges in these cases lack the necessary factual support.
“While they may have solicited or accepted orders for transactions, there is no indication that they accepted money or property to guarantee or secure those trades,” Mersinger said in her statement. She added that the CFTC should be cautious in its use of administrative tools and urged for deeper analysis and stronger evidence.
The enforcement action is being handled by the CFTC’s Division of Enforcement, led by a team including Leslie R. Kan, Michael Geiser, Elizabeth C. Brennan, David W. Oakland, and others. The CFTC’s actions reflect its ongoing crackdown on unregistered entities and false claims of regulatory oversight, particularly in the rapidly growing cryptocurrency and derivatives markets.
Despite the dissenting opinion, the cases will proceed under the Commission’s administrative process. However, Mersinger’s concerns highlight potential legal challenges the CFTC may face as the Supreme Court decision in SEC v. Jarkesy continues to influence regulatory enforcement practices.
The public is urged to verify any company’s registration status with the CFTC through the National Futures Association’s BASIC system before investing.
