The month of November is starting on a wrong note for XBT Corp. SARL, a Switzerland based securities firm, also known as First Global Credit after the exchange, found itself in trouble with SEC. Per a press release on its site, SEC has laid charges against the exchange for offering US investors security-based swaps without registration.
However, the US Securities and Exchange Commission isn’t the only agency going after First Global Credit. The Commodity Futures Trading Commission (CFTC) also filed charges against First Global Credit.
In the US Securities and Exchange Commission charge sheet, First Global Credit broke part of the Dodd-Frack Act when it floated its security-based swaps in the US without first registering them. Furthermore, the Bitcoin linked security-based swaps were floated on an unregistered national exchange.
The latter led to US-based investors being able to invest in the price movement of securities type of assets without actually owning them. The floated price movement of securities assets also included assets listed in US-based security exchanges.
To attract investors from the US, First Global Credit used different marketing methods but as described its assets in different terminologies. One of the terminologies used is Bitcoin Asset Linked Notes.
While US investors were able to invest in First Global Credit investment products, the exchange was breaking laws in place. Mr. David Peavler, Regional Director of the SEC’s Fort Worth Regional Office, explained further saying;
“In the US, Federal securities laws in place have specific requirements which firms have to adhere to before floating and selling any security-based swaps to retail investors. No one is allowed to bypass these laws by just describing their security-based swaps transaction on the market in a different way or fund their transactions in digital currencies.”
For First Global Credit violating US Federal securities laws meant it has to shut down and pay fines, and the exchange accepted to pay penalties but also shut down. Per SEC’s charge sheet, First Global Credit had to pay penalties amounting to $100,000 and another disgorgement penalty amounting to $31,687.
Besides that, First Global Credit has to pay investors the losses they incurred. In addition to SEC penalties, the Swiss-based exchange has to pay another $100,000 in its case with the CFTC.
The post SEC Goes after XBT Corp. SARL a Switzerland-based Securities Dealer for Selling Unregistered Security-Based Swaps appeared first on Crypto Economy.
https://crypto-economy.com/sec-goes-after-xbt-corp-sarl-a-switzerland-based-securities-dealer-for-selling-unregistered-security-based-swaps/
