Five Firms Have Been Charged By The CFTC For Operating As Unregistered FCMs

Five organizations have been charged by the Commodity Futures Trading Commission for acting as unregistered futures commission merchants (FCM). Cryptostockoptionstrade Ltd., Global Smart Options Broker Ltd., Hypertradingoption Ltd., StockbrokerTechniques Ltd., and SprintTrade are the organizations that claim to be headquartered in either New York, New York, or at the same street address in Los Angeles, California.

Each complaint requests an order ordering the respondent to stop violating the Commodity Exchange Act (CEA) and CFTC rules.

According to the allegations, the firms functioned as FCMs and purported to be regulated by the CFTC from roughly July 2022 until the present, but are not registered as required by the CEA.

All of the responders, as claimed, claim to be among the major platforms providing binary options, forex, and spreads. Four of the five websites also include alleged client testimonials claiming to have made large sums of money trading binary options with that company. None of these companies, according to the accusations, are registered with the CFTC in any capacity.

About CFTC

The Commodity Futures Trading Commission (CFTC) is a US government-created independent organization that supervises the US derivatives market, which includes futures, swaps, and some types of options.

The Commodity Exchange Act (CEA), 7 U.S.C. 1 et seq., outlaws fraudulent behavior in futures, swaps, and other derivatives trading. The CFTC's declared objective is to enhance the integrity, resilience, and vitality of the United States derivatives markets via effective regulation. The CFTC has been working to bring greater transparency and good regulation to the multitrillion-dollar swaps industry since the financial crisis of 2007-08, and since 2010 with the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Futures contracts for agricultural commodities have been traded in the United States for over 150 years and have been regulated by the federal government since the 1920s. The Grain Futures Act of 1922 established the fundamental power, which was modified by the Commodity Exchange Act of 1936. (7 U.S.C. 1 et seq.).

Trading in futures contracts has quickly extended beyond conventional physical and agricultural commodities into a diverse range of financial instruments such as foreign currencies, US and foreign government securities, and US and international stock indexes since the 1970s.

The CFTC was established by Congress in 1974 as an independent federal regulatory agency. The Commodity Futures Trading Commission Act of 1974 (P.L. 93-463) established the CFTC to replace the Commodity Exchange Authority of the United States Department of Agriculture. The Act significantly modified the Commodity Exchange Act (CEA) of 1936, which in turn changed the original Grain Futures Act of 1922. (7 U.S.C. 1 et seq.). The initial members, as well as the first chairman, were chosen in 1975.

When Congress approved the Commodity Futures Modernization Act of 2000 in December 2000, it directed the Securities and Exchange Commission (SEC) and the CFTC to design a combined regulatory system for single-stock futures, the products of which started trading in November 2002.

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 expanded the CFTC's regulatory power to include the swaps markets. The swaps markets have a notional value of more than $400 trillion at the moment.

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