The US CFTC (Commodity Futures Trading Commission) isn’t letting the SEC have all the crypto-regulatory fun. It’s just whacked a biggish fine on global crypto exchange Kraken.

The regulatory body has settled a US$1.25 million penalty with the large exchange, on the grounds Kraken failed to register as a futures merchant.

Here’s the CFTC statement if you fancy a dry read. But, in a red, white and blue nutshell, it says that…

• Kraken illegally offered margined retail commodities to investors between June 2020 and July 2021.

• After the exchange changed its policy on margin trading, users were unable to withdraw assets until repaying obligations in a 28-day window.

• Kraken was apparently able to “unilaterally liquidate positions if users did not make repayments within 28 days of exiting a contract”.

• “These transactions were unlawful because they were required to take place on a designated contract market and did not.”

• The exchange must cease and desist from further violations of the Commodity Exchange Act.

The fine is nothing compared to the US$100 million the CFTC and FinCEN collected from crypto derivatives exchange BitMEX in August. Although, circumstances regarding that penalty run a little deeper than the Kraken settlement.

In March, too, Coinbase was fined US$6.5 million by the CFTC over allegedly failing to control wash trading. Coinbase Pro shut down margin trading earlier this year in response.

 

President Biden’s OCC pick makes big banks and crypto nervous

Meanwhile… outspoken Texas Republican Senator Ted Cruz, is one of numerous prominent voices opposed to Joe Biden’s nomination of crypto and big-bank critic Saule Omarova as the next head of the OCC (Office of the Comptroller of the Currency).

It’s an influential position that was formerly held by the crypto-friendly Brian Brooks during the Trump administration. Brooks subsequently took on the job of Binance US CEO, but has since resigned from that role.

As a noted global-warming sceptic AND an increasingly passionate crypto supporter, Cruz is a polarising figure in the US political landscape.

He’s the cryptocurrency advocate other US crypto supporters didn’t necessarily want, or know they needed.

 

“Not only is Saule Omarova, Biden’s pick to lead the OCC, a threat to our traditional economy, she also wants to regulate crypto into oblivion,” Cruz said in a separate tweet. “Crypto faces future-defining government regulations. This nomination needs to be stopped.”

And according to Cointelegraph, several big US banks are also firmly against the Omarova nomination, with the American Bankers Association (ABA) considering publicly fighting the decision.

In a statement last week, ABA President and CEO Rob Nichols said: “We have serious concerns about her [Omarova’s] ideas for fundamentally restructuring the nation’s banking system.”

Omarova is a professor at New York’s Cornell University Law School and has previously claimed that the rise of cryptocurrencies is “benefitting mainly the dysfunctional financial system we already have.”

She has also said she would like to “end banking as we know it”.

Is the crypto industry on the same self-serving side as big banks? That’d be a no, generally speaking, but when it comes to certain regulators and politicians, survival motivations align.

Either way, “weird times” indeed and the political divide over crypto appears to be widening by the day…

 

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