The US Commodity Futures Trading Commission (CFTC) announced on Thursday that it has added 34 unregistered foreign entities to its list of registration defects (or REDList), which require companies to register with the CFTC to offer services including binary option trading, foreign exchange or other products such as cryptocurrencies.
At least six of the newly added red lists offer cryptocurrency-related services: BO Trade Financials, Crypto BO, Bitpay Options, Crypto Sphere FX, Direct Cryptos and Prime Crypto FX.
Noting that it has placed 202 entities on the red List since 2015, the CFTC warned U.S. investors to be cautious about participating in products or markets with a history of high fraud complaints and strongly urged to verify that companies are registered with the CFTC before committing money,
And be wary of unregistered entities.
Because these foreign entities are not registered with the CFTC, customers who transact with these entities may not benefit from the consumer protections, safeguards, and regulatory guardrails of the CFTC-regulated marketplace, CFTC Commissioner Kristin Johnson said in a statement.
Trading with unregistered entities, especially those operating outside the country without such oversight, can expose U.S. investors to significant risks.
The CFTC is reportedly seeking to expand its jurisdiction to be given the power to regulate the spot market for cryptocurrencies.
In early June, a bipartisan group of US senators introduced a draft cryptocurrency regulation bill that would give the CFTC explicit authority over physical markets for digital assets.