Houston, TX – The Commodity Futures Trading Commission (CFTC) has filed a civil enforcement action against Laino Group Limited, doing business as PaxForex, alleging unlawful retail commodity transactions and failure to register as a futures commission merchant (FCM). The case was filed in the U.S. District Court for the Southern District of Texas on September 28, 2020.
According to the CFTC’s complaint, PaxForex, a company registered in St. Vincent and the Grenadines, offered transactions in ether, litecoin, bitcoin, gold, and silver beginning in March 2018 without proper registration. The firm allegedly violated the Commodity Exchange Act (CEA) by failing to conduct these transactions on a CFTC-designated or registered contract market.
The agency claims PaxForex acted as an FCM by soliciting and accepting orders for retail commodity transactions, serving as the counterparty, and extending credit in exchange for margin trades. Specifically, the company allegedly accepted bitcoin and other assets as collateral. Despite functioning as an FCM, PaxForex failed to register with the CFTC as legally required.
The CFTC is seeking significant penalties, including disgorgement of any ill-gotten gains, civil monetary penalties, restitution for affected customers, a permanent ban on future registration and trading, and a permanent injunction to prevent further violations of the CEA. The specific amount of penalties sought was not disclosed in the release.
“This action shows the CFTC’s continued commitment to ensuring that entities offering leveraged, retail transactions within our jurisdiction—including those involving digital assets—register with the CFTC,” stated James McDonald, Director of the Division of Enforcement. “We will vigorously enforce these requirements to preserve market integrity and protect customers.”
The CFTC advises the public to verify a company’s registration status with the Commission before investing. Customers can use the NFA BASIC system to check registration details. The agency expressed gratitude for the assistance provided by the U.S. Attorney’s Office for the Southern District of Texas and the Federal Bureau of Investigation in the investigation.
Source: CFTC.gov
Related Federal Cases
- Carie Hallford Sentenced to 18 Years for Body Decomposition Scheme,… · New Mexico
- Juan A. Tony Marrero, Medicare Fraud Scheme, Miami FL, 2023 · Florida
- Tren de Aragua Leaders Unsealed, Terror Cartel Crimes, Texas, 2023 · New Mexico
- John McClure, Contractor Fraud Scheme, NY, 2023 · Washington
- Naiqing Lin Faces Federal Charges in Oklahoma Scheme, Oklahoma City… · Washington
