Share this article
FalconX Settles With CFTC for $1.8M Over Failure to Register as Futures Commission Merchant
In addition to paying monetary penalties, FalconX must stop providing U.S.-based customers access to crypto derivatives trading platforms.
Updated May 13, 2024, 7:34 p.m. Published May 13, 2024, 7:31 p.m.
FalconX will pay $1.8 million to settle newly-announced charges from the Commodity Futures Trading Commission (CFTC) that the crypto trading firm violated commodities laws by failing to register as a futures commission merchant (FCM), according to a Monday announcement from the regulator.
Through its “Edge” product, FalconX acted as a crypto prime broker, offering institutional clients – including some based in the U.S. – with access to various crypto exchanges to trade derivatives, including futures and swaps, the CFTC said in a press release Monday.
STORY CONTINUES BELOW
Though FalconX describes itself as the “largest digital asset prime brokerage” it was not properly registered with the CFTC. One of FalconX’s portfolio companies, FalconX Bravo, has been registered with the CFTC as a swap dealer since last August, according to the Monday settlement agreement.
The way in which FalconX conducted business for its institutional clients meant that accurate know-your-customer (KYC) information was often not provided to the crypto exchanges FalconX was trading with.
However, after the CFTC filed suit against Binance its former CEO, Changpeng “CZ” Zhao for similar offenses in March 2023, FalconX voluntarily “changed and enhanced its approach to collecting customer-identifying information” – including requiring customers to identify the location of the assets’ ultimate beneficial owners, the location of their corporate headquarters, and the location of employees controlling the investor’s Edge account.
After these new, stricter KYC requirements were put in place, FalconX told the CFTC that Edge lost half of its customers.
In its settlement agreement, the CFTC said that FalconX’s remediation efforts – as well as its “substantial cooperation” with the investigation – resulted in a lower penalty than could have otherwise been imposed.
FalconX must pay $1,179,008 in disgorgement and a $589,504 civil penalty, and must cease and desist from acting as an unregistered FCM.
FalconX did not respond to CoinDesk’s request for comment by press time.
More For You
What to know:
- As of October 2025, GoPlus has generated $4.7M in total revenue across its product lines. The GoPlus App is the primary revenue driver, contributing $2.5M (approx. 53%), followed by the SafeToken Protocol at $1.7M.
- GoPlus Intelligence's Token Security API averaged 717 million monthly calls year-to-date in 2025 , with a peak of nearly 1 billion calls in February 2025. Total blockchain-level requests, including transaction simulations, averaged an additional 350 million per month.
- Since its January 2025 launch , the $GPS token has registered over $5B in total spot volume and $10B in derivatives volume in 2025. Monthly spot volume peaked in March 2025 at over $1.1B , while derivatives volume peaked the same month at over $4B.
More For You
Key U.S. Senator on Crypto Bill, Lummis, Negotiating Dicey Points With White House
The Republican lawmaker who is among the core negotiators on the U.S. market structure bill said the White House has rejected some ethics language.
What to know:
- Sen. Cynthia Lummis (R-Wyo.) said she is negotiating with the White House on behalf of Senate Democrats trying to insert ethics provisions into Congress' market structure legislation.
- Lawmakers should reveal a new draft market structure bill by the end of the week and hold a markup hearing next week, she said.
Top Stories
