The SEC Files Charges Against XBT Corp While CFTC Settles

The SEC files charges against XBT Corp. SARL and on the same day, the Commodity Futures Trading Commission (CFTC) settled the charges against the same company so we are reading more about it in the latest cryptocurrency news.

In a press release on October 31, the SEC alleged that the Swiss-based securities dealer, XBT Corp. SARL that operates under the name First Global Credit offered and started selling unregistered security-based swaps to the US investors without complying with the registration and exchange requirements that govern the security-based swaps.

The SEC went on and explained that XBT Corp. SARL used a multitude of marketing methods to lead some of the US individuals into using Bitcoin and to also buy and sell a variety of investment products. Also, the company reportedly attempted to use different terminology to describe the investments it offered including the Bitcoin Asset Linked Notes to which the regional director of the SEC’s Fort Worth Regional Office David Peavler explained:

“Federal securities laws impose specific requirements for offering and selling security-based swaps to retail investors in the U.S. These obligations cannot be avoided merely by describing the swap transaction by a different name or funding it with digital currencies.”

The SEC files the charges after acknowledging that XBT Corp. SARL also failed to transact the security-based swaps on registered national exchanges and failed to register as a security-based swaps dealer. XBT Corp. SARL didn’t admit but also didn’t deny the findings of the Securities and Exchange Commission and agreed to a cease-and-desist order and an additional penalty of $100,000.

The CFTC filed and settled similar charges against the same company for the failure to register with the Commission as a futures commission merchant. The complaint requires the company to pay another $100,000 civil monetary penalty and to disgorge gains that were gathered during the connection with the violations and to cease and desist from future violations. The CFTC Director of Enforcement James McDonald said:

 “This case demonstrates that the CFTC will hold intermediaries accountable if they solicit or accept orders without properly registering with the agency. This case also underscores that the Commission will continue working with our law enforcement and regulatory partners to ensure the integrity of our markets.”