The Commodity Futures Trading Commission (CFTC) announced today that it has issued QC Clearing LLC an Order of Registration as a derivatives clearing organization (DCO) under the Commodity Exchange Act.

A DCO is an entity that facilitates the clearing of derivatives contracts by substituting the credit of the DCO for the credit of the involved parties. It also manages the settlement or netting of obligations on a multilateral basis and transfers credit risk among participants.

CFTC Grants Registration to QC Clearing

QC Clearing, a Delaware-registered limited liability company based in Boca Raton, Florida, was granted registration after demonstrating its ability to comply with the CEA and CFTC regulations. This brings the total number of DCOs registered with the CFTC to 19.

A DCO must register with the CFTC to provide clearing services for futures contracts, options on futures, or swaps. The CFTC may exempt a DCO from registration if it is subject to comparable supervision by relevant authorities in its home country.

.@CFTC Grants QC Clearing LLC DCO Registration: https://t.co/YdsSlRvnaq

— CFTC (@CFTC) December 17, 2024

CFTC Secures Record $17.1 Billion Penalties

While the approval of QC Clearing as a registered DCO highlights the CFTC's role in fostering compliant market participants, the record-setting penalties underscore the regulator's commitment to enforcing strict adherence to its rules across all entities under its jurisdiction.

In 2024, the CFTC secured over $17.1 billion in penalties, restitution, and disgorgement, marking a record high. This total includes $2.6 billion in civil monetary penalties and $14.5 billion in disgorgement and restitution. The increase in enforcement activity spanned both traditional and emerging markets, with a significant focus on digital asset commodities, as reported by Finance Magnates.

The CFTC’s digital asset actions contributed to the record figure, including the $12.7 billion settlement Settlement Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 Read this Term with FTX and Alameda Research, which involved $8.7 billion in restitution and $4 billion in disgorgement. This case marked the largest recovery for victims and the most substantial penalty imposed by the CFTC.

Binance and its founder, Changpeng Zhao, faced penalties of $1.35 billion in civil monetary penalties and an additional $1.35 billion in disgorgement. The CFTC also pursued aggressive actions in decentralized finance (DeFi) and fraud cases within crypto markets.

Additionally, the CFTC targeted deceptive practices in various commodity markets, including gasoline, fuel oil, and carbon credits. The agency issued a record number of whistleblower Whistleblower A whistleblower is an individual who manages to provide information or activity within a private or public organization that is deemed illegal, unethical, or not correct. In many countries, including the United States, whistleblowers are protected by law and in some cases can even recoup rewards if their information leads to successful prosecution.In the context of the financial services industry, whistleblowers play a large role in oversight, helping unmask several episodes of illicit behavior A whistleblower is an individual who manages to provide information or activity within a private or public organization that is deemed illegal, unethical, or not correct. In many countries, including the United States, whistleblowers are protected by law and in some cases can even recoup rewards if their information leads to successful prosecution.In the context of the financial services industry, whistleblowers play a large role in oversight, helping unmask several episodes of illicit behavior Read this Term awards totalling over $42 million in 2024.