CFTC fines Kraken $1.25 million for unregistered margin trading

October 8, 2021

CFTC fines Kraken $1.25 million for unregistered margin trading

The US Commodity Futures Trading Commission (CFTC) has fined the Kraken exchange for unregistered offering retail margin trading of digital assets, including bitcoin.

THE LATEST: Commissioner Stump’s concurring statement on enforcement action against Payward Ventures, Inc. (d/b/a Kraken). 

According to the order, in addition to paying a civil penalty of $1.25 million, the platform must "cease and desist from further violations of the Commodity Exchange Act as charged.

According to the regulator, Kraken offered retail margin trading to US customers from around June 2020 to July 2021. These transactions were illegal because they must take place on designated contract markets (DCMs).

In addition, the exchange was operating without registering as a futures commission merchant (FCM), the Commission said.

"Our actions are part of the CFTC's efforts to protect US customers. Trading in digital assets on margin, leveraged or financed by retail customers must take place on duly registered and regulated exchanges in compliance with all applicable laws and regulations," said CFTC Acting Director of Enforcement Vincent McGonagle.

As a reminder, Coinbase, the largest US cryptocurrency exchange, has applied for FCM status.

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About the author

Hi there, my name is Zalman Weinberg. I'm enthusiast with over 7 years of experience in cryptocurrencies and blockchain. Professional Trader providing Blockchain solutions to Startups and Enterprises. Expert in all cryptocurrency exchange APIs (BitMEX, Bittrex, Binance, Bitfinex, Kraken, Poloniex, Gdax etc.). I have also worked with multiple Forex broker APIs.

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