Swiss-based securities dealer charged by SEC and CFTC for failing to register security-based swaps

U.S. financial regulators have charged a Switzerland-based securities dealer for selling unregistered swaps to U.S. investors and failing to transact them on a registered U.S. exchange, according to a pair of news releases.

The Securities and Exchange Commission (SEC) and the U.S. Commodities Trading Futures Commission (CFTC) are accusing XBT Corp. SARL d/n/a First Global Credit of offering the unregistered security-based swaps, as well as using marketing methods to target U.S. bitcoin users. A release from the CFTC soon followed, stating the order was filed and charges were settled today.

First Global Credit complied with a cease-and-desist order and agreed to pay disgorgement, or repayment of gains from the product, and a penalty of $100,000.


Keep up with the latest news, trends, charts and views on crypto and DeFi with a new biweekly newsletter from The Block's Frank Chaparro

By signing-up you agree to our Terms of Service and Privacy Policy
By signing-up you agree to our Terms of Service and Privacy Policy

First Global Credit used different terminology to describe the investments, such as "bitcoin Asset Linked Notes." However, the regulators said the investors were still exposed to price movements of securities without owning them, including some on U.S. securities exchanges, which it considers security-based swaps. First Global Credit failed to register the instrument with the SEC and CFTC, incurring the charge.

David Peavler, Regional Director of the SEC's Fort Worth Regional Office said in a statement that obligations pertaining to swaps can't be avoided by describing the swap under a different name or funding it with digital currencies.  

In addition to offering the product to U.S. investors and failing to transact on a registered national exchange, the regulators also said First Global Credit failed to register as a security swaps dealer. 


About Author

Aislinn Keely is a reporter on The Block's policy team holding down the legal beat. She covers court decisions, bankruptcies, regulatory actions and other key moments in the legal sphere, putting them in context for the wider crypto industry. Before The Block, she lent her voice to the NPR affiliate WFUV and helmed Fordham University's student newspaper. Send tips or thoughts on all things policy and legal to [email protected] or follow her on Twitter for updates @AislinnKeely.