September 29, 2021

CFTC Kraken Fines, RM5.23 Million Must Be Paid!

 The cryptocurrency exchange platform, Kraken had to pay a fine to the Commodity Futures Trading Commission (CFTC) worth $ 1.25 million (~ RM5.23 million) following the offense of illegally offering Bitcoin (BTC) and cryptocurrency -linked margin products and cryptocurrencies.

The CFTC clarified in a statement yesterday that Kraken was found to have failed to register as a futures commission trader and illegally conducted a margin offering of retail commodity transactions in digital assets for the period June 2020 to July 2021.

CFTC director of enforcement Vincent McGonagle believes the action taken is aimed at ensuring the protection of United States (US) customers.

The agency also criticized aspects of the services Kraken offered because consumers find it difficult to withdraw assets as long as repayments are not made.

Not only that, if the consumer does not make a repayment within 28 days, Kraken is able to make margin withdrawals without the consumer’s consent, including liquidating the asset if the value of the collateral falls below a certain percentage of the total margin outstanding.

In addition to Kraken, other crypto exchanges also face similar fines by the CFTC.

BitMEX had to pay fines totaling $ 100 million to the CFTC and FinCEN in August.

Coinbase was fined $ 6.5 million in March.

Binance is also facing CFTC oversight this year but there are still no recent developments.

Bitfinex received a $ 75,000 fine in 2016 for the execution of an illegal offering of off-exchange commodity transactions and failure to register as a commodity futures business.