BFXNA Inc., doing business as Bitfinex, agreed to settle charges brought by the Commodity Futures Trading Commission that, from approximately April 2013 through at least February 2016, it allegedly engaged in prohibited, off-exchange commodity transactions with retail clients and failed to register as a futures commission merchant, as required. According to the CFTC, during the relevant time period, Bitfinex “operated an online platform for exchange and trading cryptocurrencies, mainly Bitcoins.” The CFTC said that Bitfinex’s platform allowed users that were not eligible contract participants to borrow funds to purchase Bitcoins from other platform users. (ECPs include, among others, individuals who invest more than US $10 million on a discretionary basis, or more than US $5 million to hedge the risk of an asset; click here to access the Commodity Exchange Act §1a(18) for a definition of an ECP.) However, financed Bitcoins purchased were not delivered to purchasers within 28 days as required for retail clients under applicable law. Bitfinex agreed to pay a fine of US $75,000 to resolve the CFTC’s charges and to cease and desist from future violations. The CFTC acknowledged that Bitfinex’s cooperation with it was “significant” during the course of its investigation. In a 2015 enforcement action, the CFTC held that Bitcoin and other virtual currencies are commodities under applicable law and within the remit of the CFTC. (Click here for details in the article, “CFTC Says Virtual Currencies Are a “Commodity” Under Federal Law, Files Charges Against Coinflip for Operating an Unregistered Bitcoin Options Trading Platform” in the September 20, 2015 edition of Bridging the Week.)