Did CFTC Regulations Prevent Bitfinex From Offering Cold Storage?
Some notable experts claim that this regulatory framework presented by the CFTC may have prevented Bitfinex from using cold storage. On June 2, the U.S. Commodity Futures Trading Commission (CFTC) fined Bitfinex US$75,000 for handling illegal off-exchange financial retail commodity transactions without registering as a futures commission merchant. The CFTC – alongside other regulators – required the exchange to deliver the digital currency directly to their users, instead of holding the private keys controlling the traded coins. The official order stated that Bitfinex “did not actually....
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Following the hack of exchange Bitfinex and the theft of almost 120,000 BTC ($60 million), suggestions are surfacing that regulation prevented its funds from being placed in cold storage wallets. Fingers Point at BitGo, Regulators. As the investigation into the sequence of events and their cause continues, blame is being shifted between Bitfinex, its....
The U.S. Commodity Futures Trading Commission (CFTC) ordered Bitfinex, a Hong Kong-based bitcoin exchange, to pay $75,000 for offering illegal, off-exchange, financed retail commodity transactions in cryptocurrencies, and for failing to register as a futures commission merchant (FCM) as required by law, according to a CFTC press release. The order requires the exchange to cease and desist from future violations of the Commodity Exchange Act (CEA). CFTC Cites Dodd-Frank Act. From April 2013 to at least February 2016, the CFTC found Bitfinex allowed users to borrow funds from one another to....
Bitfinex has been fined by the U.S. Commodity Futures Trading Commision for offering illegal off-exchange financed retail commodity transactions in Bitcoin Bitfinex, one of the world’s largest Bitcoin and cryptocurrency exchanges, has been fined by the U.S. Commodity Futures Trading Commision (CFTC) for offering illegal off-exchange financed retail commodity transactions in Bitcoin and also failing to register as a Futures Commission Merchant (FCM). The company is required by the Order to pay a US$75,000 civil monetary penalty in total, for other alleged illegal operations such as....
Hong Kong-based bitcoin exchange Bitfinex has settled with the US Commodity Futures Trading Commission (CFTC) following an investigation into its financed trading activities. Bitfinex settled charges that it offered illegal off-exchange financed retail commodities trading, as well as failed to register as a futures commission merchant. Bitfinex did not admit or deny the CFTC findings, the agency said today. According to an order published today by the CFTC, the issues arose owing to how Bitfinex held functional control over funds tied to leveraged or margin trading on the platform. The....
Nearly two weeks after losing more than $60m in customer funds, Bitfinex reports it has not yet identified how the theft was carried out. In a statement released earlier today, the exchange reported it had hired Ledger Labs, a blockchain consultancy previously contracted by ShapeShift following its own cybersecurity problems, to both investigate the theft as well as perform a balance sheet audit. Bitfinex further said that it is "reassessing" storage options in light of the hack. The incident would force the exchange to impose a 36% haircut on customer holdings, a move that....