Cryptocurrency exchange Kraken faces a fine of $1.25 million… Find out why!
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Answer Cryptocurrency exchange Kraken faces a fine of $1.25 million… Find out why!
The Commodity Futures Trading Commission (CFTC) issued an order Tuesday fining cryptocurrency trading platform Kraken after it illegally submitted cryptocurrency margin transactions.
The futures regulator has already settled the fee with cryptocurrency exchange Kraken, demanding a $1.25 million civil fine, along with a cease and desist order for further violations of the regulation.
Founded in 2011, Kraken is one of the oldest cryptocurrency exchanges in the US and around the world.
In addition to its seniority, it is well regulated and also holds a license from the US state of Wyoming.
However, the platform is not allowed to offer and offer margin products in the US as it is not registered with the CFTC as a futures commission trader (FCM).
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According to the official statement, Kraken offered margin products for cryptocurrency from about June 2020 to July 2021 to its clients in the USA.
Therefore, the platform is now obligated to notify its users of the need to exit their positions within 28 days, otherwise it will automatically liquidate the positions.
Vincent McGonagall, Acting Executive, CFTC said:
This action is part of the CFTC’s broader efforts to protect US customers.
Cryptocurrencies must be traded on margin, leveraged or funded for US retail clients on properly registered and regulated trading platforms in accordance with all applicable laws and regulations.
Rushing into the crypto derivatives market:
While cryptocurrency derivatives are popular in international markets, only a few trading platforms are licensed to offer them in the USA.
But now, the country’s major cryptocurrency exchanges are slowly jumping in for permission to provide crypto derivatives.
Recently, Coinbase applied for membership in the National Futures Association, while the US subsidiary of FTX acquired a trading platform in crypto-derivatives regulated by the CFTC.
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