HOUSTON, TX – The Laino Group Limited, operating as PaxForex, has been slapped with a hefty penalty and trading ban following a default judgment entered by U.S. District Judge David Hittner in the Southern District of Texas. The Commodity Futures Trading Commission (CFTC) brought the case, alleging the company engaged in illegal, off-exchange commodity transactions.
The judgment, finalized June 30, 2021, prohibits PaxForex, based in St. Vincent and the Grenadines, from engaging in any future commodity interest transactions, soliciting customers, or registering with the CFTC. The company is also ordered to pay a $374,864 civil monetary penalty.
The CFTC initially filed a complaint in September 2020, accusing PaxForex of facilitating leveraged, margined transactions in cryptocurrencies – specifically Ether, Litecoin, and Bitcoin – as well as precious metals and foreign currency, without proper registration as a futures commission merchant (FCM). Investigators found that from at least March 2018, PaxForex offered these unlawful retail commodity transactions.
According to the CFTC, PaxForex bypassed established regulations by failing to conduct transactions through a CFTC-designated or registered contract market. The company further operated as an FCM by soliciting orders and acting as a counterparty, accepting Bitcoin and other assets to margin trades.
The CFTC emphasizes the importance of verifying a company’s registration status before investing. Customers are urged to exercise caution when dealing with unregistered entities. The NFA BASIC system is available to check registration details.
The CFTC acknowledged the assistance of the U.S. Attorney’s Office for the Southern District of Texas and the Federal Bureau of Investigation in pursuing the case. The Enforcement Division team included Harry E. Wedewer, Chris Giglio, Candice Aloisi, Mary Lutz, Lenel Hickson, Jr., and Manal M. Sultan, with support from the Office of Information Technology’s Devon Malinowski and Salma Mack.
Source: CFTC.gov
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