Comment Period Extended for Proposed Bitcoin SEF
On February 4th, the Commodity Futures Trading Commission (“CFTC”) extended to February 20, 2015, the date by which comments may be submitted in response to LedgerX’s request for registration as a derivatives clearing organization and registration as a swap execution facility for the listing and clearing of fully collateralized, physically settled options on bitcoins. CFTC Press Release.
Bank Ordered to Pay Customers of FCM $18 Million
On February 4th, the CFTC announced that a U.S. District Court has entered a consent order imposing a permanent injunction against a bank and ordering the bank to pay $18 million dollars to be returned to a Future Commission Merchant’s (“FCM”) customers. The Court had previously found that in 1992, the FCM opened an account at a predecessor to the bank and designated the account as a customer segregated account. The bank provided two letters to the FCM acknowledging the account contained customer money, would be properly segregated, and maintained in accordance with the Commodity Exchange Act. At that time, however, the bank had no policies, procedures or training specifically applicable to customers of FCMs or customer segregated funds and no employees with responsibility for the account understood the significance of the account designation. During the relevant period, the owner of the FCM, improperly withdrew approximately $36 million from the account while the bank regularly and improperly withdrew account fees from the account. CFTC Press Release.