US CFTC Brings Action Against $147 Million Bitcoin Investment Scheme
|The United States Commodity Futures Trading Commission (CFTC) launched action against a reportedly fraudulent $147 million bitcoin (BTC) scheme, fintech news outlet FinanceFeeds reports June 18.
On June 17, the regulator reportedly filed a complaint with the New York Southern District Court against now-defunct United Kingdom-based entity Control-Finance Ltd, which reportedly defrauded more than 1,000 investors to launder at least 22,858 bitcoin.
The CFTC also brings actions against the entity’s head, Benjamin Reynolds, stating that Control-Finance and Reynolds “exploited public enthusiasm for Bitcoin” from May 1, 2017, to October 31, 2017. The action seeks civil monetary penalties, including “permanent trading and registration bans, restitution, and disgorgement,” the report notes.
Citing documents by the CFTC, FinanceFeeds reported that Control-Finance was soliciting investors to buy their bitcoin with cash and deposit it with the firm, as they claimed to guarantee daily trading profits on the deposits through employed professional cryptocurrency traders. The alleged scammers were further sending portions of new clients’ BTC deposits to other customers, misrepresenting those as actual profits generated from crypto trading.
According to the report, Control-Finance suddenly took down its website on or around September 10, 2017, suspending payments to clients, as well as deleting advertising content from its profiles on social media including Facebook, YouTube and Twitter. Claiming that the firm would reimburse customers by late October or November 2017, the allegedly fraudulent entity reportedly diverted laundered bitcoin using crypto wallet service CoinPayments.
Recently, the British Financial Conduct Authority (FCA) issued a warning against a fraudulent firm posing as the Swiss Investment Corporation, an FCA-authorized firm offering crypto investments. At the time, the regulator also reported on another fraudulent entity that is a clone of global investment bank Goldman Sachs.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.