The Commodity Futures Trading Commission (CFTC) says it has issued an order filing and settling an enforcement action against Utah-based Treasury Vault for acting as an unregistered retail foreign exchange dealer.
Starting in September 2017, CFTC says Treasury Vault began offering FX services through its website to US retail customers who were not eligible contract participants – these customers traded in Vietnamese dong and/or Iraqi dinar.
According to the order, Treasury Vault offered customers FX transactions utilising a “reserve program” financing option. The “reserve program” was financed by Treasury Vault, which acted as the counterparty to the retail forex transaction. “These transactions did not result in actual delivery of forex within two days of the transaction but the customers did receive their forex over a period of not less than fifteen days following the date of the transaction,” CFTC says.
The order requires Treasury Vault to cease and desist from further violations, and to pay a civil monetary penalty of $75,000. CFTC says it also recognises Treasury Vault’s cooperation with the Division of Enforcement’s investigation of this matter in the form of a substantially reduced civil monetary penalty.
“This action reinforces that entities wishing to offer forex transactions to retail customers must ensure that they are registered and abide by the laws designed to protect the public,” says CFTC director of enforcement James McDonald.