CFTC Slams $1.37m Fine on Starberry for Acting as FCM without a Permit

The Commodity Futures Trading Commission (CFTC) on Friday disclosed that it has ordered Starberry Limited to pay $1,376,206.81 as a civil monetary penalty.

The amount is to settle the charges against the Cyprus-headquartered business corporation.

The CFTC charged Starberry for acting as a futures commission merchant (FCM) without registration.

According to the US derivatives markets regulator, Starberry between February 28 and March 17, 2020 accepted more than $400 million from a foreign customer.

After depositing the fund in its trading account, Starberry executed NYMEX West Texas Intermediate (WTI) crude oil futures contracts trades with the fund, the CFTC added.

The corporation made more than $86 million in profits for the foreign customer, the regulator noted, adding that Starberry earned $1,376,206.81 in commission and fees from the arrangement.

The fine aside, the CFTC said it had warned Starberry against further violating Section 4d(a)(1) of the Commodity Exchange Act (CEA).

“Starberry also agrees to disgorge $1,376,206.81 in commission and fees it unlawfully earned by acting as an FCM without registration,” the CFTC said in a media release.

Gretchen Lowe, the Acting Director of Enforcement, noted that the watchdog will continue to clampdown on FCMs that are not registered.

“The CFTC strongly urges the public to verify a company’s registration with the CFTC before committing funds," the CFTC said in the statement.

"If unregistered, a customer should be wary of providing funds to that company. A company’s registration status can be found using NFA BASIC,” the regulator added.

CFTC and Crypto

Earlier this month, the CFTC sued the cryptocurrency exchange, Gemini for allegedly misleading the regulator while undergoing the approval process for a Bitcoin futures product in 2017.

Additionally, the regulator alleged that Gemini personnel “knew or reasonably should have known” about the false or misleading information the exchange was providing.

Moreover, the CFTC recently bust a $44 million ponzi cryptocurrency investment scheme.

The regulator said perpetrators defrauded at least 170 investors.