The US Commodity Futures Trading Commission (CFTC) today updated its caution list, the ‘RED List,’ in which it warns the public against unauthorized FX and binary options firms that are illegally conducting financial services targeting the country’s residents.
The CFTC added 34 new names to the list, bringing the total number of backlisted entities to 202.
The CFTC has been active recently in its cleanup of the forex space with charges being brought against a dozen of brokers and trading apps. Just last week, the agency hit Interactive Brokers LLC with a roughly $1 million fine for failing to adhere to certain regulations, including that it failed to supervise its employees’ handling of exchange fees charged to customers.
The registered futures commission merchant was ordered to pay $710,828.14 in disgorgement with credit for money paid to affected customers, and a $300,000 civil monetary penalty, as part of its settlement with the CFTC.
Today’s warning is also another action within the US regulators’ crackdown on binary options operatives after a series of cases uncovered massive fraud in the shady industry.
The RED List
Short for ‘Registration Deficient List,’ the RED list follows the example of other regulators abroad, such as the AMF (Autorité des marchés financiers) in France, which allows investors to identify unregistered foreign entities that may be engaged in illegal practices.
The US regulator’s list includes forex and binary options brokers that appear to be soliciting and/or accepting funds from US residents without having obtained CFTC registration, providing more protection and transparency for investors.
According to the CFTC, many of these foreign entities are acting in a capacity requiring them to be registered with the CFTC. Registration allows the agency to provide greater security and oversight of the industry by examining whether firms meet minimum financial standards as well as disclosure, reporting, and recordkeeping requirements.
However, the press release emphasized that registration is no guarantee against fraud or mismanagement by an unethical firm, although it does help bring a higher level of security and accountability to the industry.
The following brands have been added to the RED List:
|Cent Projects, Ltd.|
|Alis Capital Inc.|
|Bluegate Financial Services|
|Capital Forex Trade|
|Capital Trading Hub|
|Dynamics FX Trade|
|Menne Market Ltd.|
|The Traders Domain|
|Tifu Global Limited|
|Prime Crypto FX|
|Wolves Trade FX|