The cryptocurrency brokerage firm Falcon Labs has agreed to settle charges brought against it by the United States Commodity Futures Trading Commission (CFTC) for approximately $1.8 million. The CFTC accused Falcon Labs, owned by FalconX, of failing to register as a futures commission merchant and improperly facilitating access to digital asset exchanges. As part of the settlement, FalconX will no longer offer services to U.S. residents and will pay $1.2 million in disgorgement and $600,000 in civil monetary penalties. The CFTC’s Enforcement Director, Ian McGinley, emphasized that the agency will not tolerate exchanges that fail to comply with its rules. This is the first time that the CFTC has charged an intermediary for inappropriately facilitating access to exchanges. The settlement alleged that FalconX facilitated orders for digital asset derivatives for U.S. users from October 2021 to March 2023. The CFTC acknowledged FalconX’s cooperation and remediation efforts, resulting in a lower penalty. FalconX did not respond to requests for comment. CFTC Chair Rostin Behnam has warned that more enforcement actions can be expected against crypto firms operating in the U.S. in the next two years. In 2023, the CFTC filed 47 enforcement actions against crypto firms.
FalconX brokerage firm faces $1.8M settlement following CFTC announcement