Bitcoin-based CFD firm sanctioned by U.S. court

U.S. derivatives regulators have ordered almost US$1 million in sanctions, disgorgement and restitution against an offshore trading platform for dealing in contracts for difference (CFDs) that allowed customers to settle trades in Bitcoin.

The U.S. Commodity Futures Trading Commission (CFTC) announced that a federal court has entered an order resolving the regulator’s action against the firm, 1pool Ltd., which is based in the Marshall Islands, and Patrick Brunner, its CEO and owner, for illegally offering retail commodity transactions, accepting Bitcoin as margin without proper registration, and supervisory failures for not having adequate anti-money laundering (AML) procedures.

The order imposes a monetary penalty of $175,000 (all figures in U.S. dollars), requires the disgorgement of $246,000, and requires them to return approximately $570,000 in Bitcoin to their U.S. customers. They consented to the order without admitting or denying the allegations.

“Intermediaries should take notice that they will be held accountable by the 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,” said James McDonald, director of enforcement at the CFTC.

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