CFTC still has no contact with unregistered FX broker PaxForex
The United States Commodity Futures Trading Commission (CFTC) has admitted that three months after the launch of its action against unregistered FX broker PaxForex, it still has not had any contact with representatives of the offshore firm.
According to the latest document filings with the Texas Southern District Court, the CFTC is continuing its efforts to serve Laino Group Limited, doing business as PaxForex, through the Central Authorities in Saint Vincent and The Grenadines, and the United Kingdom, respectively, pursuant to the requirements of the Hague Convention.
PaxForex’s domain, www.paxforex.org, continues to provide access to its trading platform, the CFTC notes in a letter to the Court. But the Commission has not had any contact with representatives of PaxForex.
The Court has granted a motion by the CFTC to extend the time to effect service on the defendant until April 6, 2021.
PaxForex operates a website and trading platform, which allows customers to trade FX, precious metals and certain digital assets including ether, litecoin, and bitcoin. The CFTC alleges that the problem with PaxForex’s business is that it is illegally soliciting or accepting orders for leveraged, margined or financed retail off-exchange Forex, precious metals, and digital asset transactions from U.S. customers without being registered with the CFTC.
According to the CFTC’s Complaint, from at least March 2018 through the present, PaxForex, through the actions of its officers, employees, and/or agents, has conducted a business in the United States in a manner that violates Section 4(a) of the Commodity Exchange Act, 7 U.S.C. § 6(a) (2018).
Further, without registering with the CFTC as a futures commission merchant (FCM), PaxForex, in or in connection with Forex and retail commodity transactions, accepts money, securities, or property (or extends credit in lieu thereof) in the form of bitcoin or other assets, to margin, guarantee, or secure trades or contracts that result or may result therefrom, in violation of Section 4d(a)(1) of the Act, 7 U.S.C. § 6d(a)(1) (2018).
The CFTC has brought an action to enjoin PaxForex’s unlawful acts and practices, to compel compliance with the Act, and to further enjoin the firm from engaging in any commodity-related activity.
The regulator also seeks civil monetary penalties and remedial ancillary relief, including but not limited to, trading and registration bans, disgorgement, restitution, rescission, pre-judgment and post-judgment interest.