The Commodity Futures Trading Commission (CFTC) has directed a crypto broker to return Bitcoins to “all known U.S customers” after failing to follow the laid out anti-money laundering guidelines set by the commission and failing to register with the commission.
The CFTC said that the crypto broker, 1pool, was illegally offering retail commodity transactions margined in Bitcoin. This, coupled with a lack of proper AML mechanisms in place will require the crypto broker pay a fine of close to one million U.S dollars ($990,000).
CFTC’s Director of Enforcement, James McDonald, said:
Intermediaries should take notice that they will be held accountable by CFTC for failing to comply with registration requirements and failing to implement policies and procedures that are crucial in protecting U.S customers and our markets. Through the Division’s Bank Secrecy Task Force, Enforcement will continue to investigate and prosecute such violations.
The $990K Patrick Brunner the owner of 1pool is supposed to pay includes a civil monetary penalty of 175 thousand U.S dollars, disgorgement of 246 thousand U.S dollars, and return 93 Bitcoins to U.S customers. The Bitcoins have been valued at 570 thousand U.S dollars.
The case involving the crypto broker was first brought to the attention of regulators in September last year. However, some of the fines charged to the crypto broker seem to be unjust compared to other fines imposed by regulators in the past.
For example, in the past, crypto miners based in Texas were charged 25 thousand U.S dollars for operating without a license as stipulated by the securities laws in Texas.
Maybe the biggest crime Brunner committed was registering his crypto brokerage firm in the Marshals Islands. In the recent past, the Marshals Islands has been a preference for crypto brokerage scammers.
Do you think the offenses committed by the crypto broker warranted such a hefty fine?
Let us know your thoughts in the comments section below.