Plutus Financial and Plutus Technologies Philippines fined $150K for illegal off-exchange trading

The Commodity Futures Trading Commission (CFTC) settled charges against California-based Plutus Financial Inc., and Plutus Technologies Philippines Corp. for illegal off-exchange swaps in digital assets and foreign currency with US and overseas customers and registration violations.

The US regulator imposed a civil monetary penalty of $150,000 on the two companies. The Securities and Exchange Commission (SEC) has lead a parallel enforcement action with a settlement as well.

CFTC penalty

CFTC Director of Enforcement James McDonald said:

James McDonald, CFTC

James McDonald
Source: LinkedIn

This case underscores, once again, that the Commission will continue working with our regulatory partners to ensure the integrity of our markets, including those involving digital assets. Rooting out misconduct is essential to furthering the responsible development of these innovative financial products.

The CFTC found that between December 2017 and October 2019 Plutus Financial Inc. and Plutus Technologies Philippines accepted orders digital asset and foreign currency-based contracts via a mobile phone application. The contracts were swaps under the CEA, enabled customers to enter into financial transactions.

The two companies acted as counterparty to gain exposure to price movements for more than 75 digital assets. With this they violated the law which states that only an eligible contract participant can enter into a swap unless the swap is entered into on, or subject to the rules of, a board of trade designated as a contract market. The companies also illegally operated as an unregistered futures commission merchant.

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