CFTC Warns More Than 20 Forex Brands

The US Commodity Futures Trading Commission (CFTC) updated its latest caution list or the Registration Deficient List-the ‘RED List,’. In this list CFTC warns the public against unauthorized Forex and binary options companies that are illegally conducting Forex business activities and targeting the US residents. Total number of listed companies is 146 but now the CFTC added 22 new names to the list, bringing the total number of blacklisted entities to 168.

US regulator recently has been active in its clearing of the forex industry with charges being brought against a few of brokers and trading apps. In the end of the August, the commission hit OANDA Corporation with a $500,000 fine for failing to adhere to certain regulations, including that it failed to meet minimum capital requirements. The charges were that OANDA failed to meet the minimum financial requirements for Retail Foreign Exchange Dealers and FCMs and violated the equity withdrawal restriction that resulted from making dividend payments on three occasions.

Further, in the beginning of June, Gain Capital UK was ordered to pay a civil penalty of $250,000 over allegations it signed up US investors to its FX trading platform. It has also agreed to disgorge $241,671 and to ‘cease and desist’ from any futures breaches.

Recent warning is another reaction towards Forex broker within the CFTC’s crackdown on binary options operatives after a series of cases uncovered massive fraud in the dubious industry.

This time companies like Allegra Markets, IDB Traders/Baltic Concert LLP, Capital 245, MM Financial Experts, Coinexx, Omega Crypto, Crown Finance, Omega Capitals, EagleFX, Platin CFD, Easy Line Pro, Richmond FG, F1 Trade, Top Option 360, FX Dealer, Trade GF, FXVIP, Turnkey Forex, Global Capital Options, VIP Businesses, Grand Tradefx, Wellington INV/Bali Limited LTD have been added to the 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 RED list contains names of foreign entities that appear to be acting in a capacity that requires registration with the CFTC, but they are not registered with the CFTC. The inclusion of an entity’s name on the RED List does not mean that the CFTC or a court has concluded that a violation of any provision of the Commodity Exchange Act or the Commission’s Regulations has occurred.

However, investors should be cautious of unregistered firms or individuals when participating in products or markets that historically have seen a large number of fraud complaints. These include binary options, forex, digital currencies, commodity pools, and precious metals. Registration with CFTC 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.

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. According to the CFTC, many of these foreign entities mentioned in the RED list are acting in a capacity requiring them to be registered with the CFTC.

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