July 11, 2019, | AtoZ Markets – The Texas Federal Court fined Morgan Hunt and Kim Hecroft in the amount of $ 400,000 in connection with a lawsuit on binary options scam charges filed by the Commodity Futures Trading Commission (CFTC).
CFTC impersonators operated binary options scam
The US CFTC alleges, that defendants Hunt and Hecroft were soliciting bitcoin from their victims to invest in different trading products, including Forex, binary options, and diamonds and later misappropriated customers funds.
The scammers were operating through their companies – Hunt’s Diamonds Trading Investment House and Hecroft’s First Options Trading.
According to the Trading Commission’s complaint, Hunt and Hecroft used Facebook and email to lure crypto investors into their scheme and falsely claimed that they would use received funds to invest in trading for the benefit of the customers.
The scammers provided thair victims with fake account numbers and forged documents
In addition, as the US authority explained, to look more persuasive and reliable, binary options scam members misrepresented their experience and track record as traders and portfolio managers.
Lastly, the fraudsters falsely told their victims that they could not withdraw their purported investment profits without first paying a tax to the CFTC.
As CFTC investigators’ impersonators, the scammers provided their clients with fake account statements and sent forged documents purportedly authored by the CFTC’s General Counsel and bearing the image of the CFTC’s official seal.
According to the US Commission’s complaint, the binary options scam scheme has been going on since January 2017 until the authorities uncovered the illicit enterprises in September 2018.
As per Texas Federal Court Order, Hunt and Hecroft will have to pay restitution and around $400,000 civil monetary penalty. In addition, both defendants are permanently restricted from trading. The CFTC, however, has warned the public in its official note, that orders requiring the return of funds to victims cannot lead to the recovery of the entire amount of lost funds.
As the authority explained, offenders may just not have sufficient funds or assets. The CFTC will continue to actively strive to protect clients and ensure that violators are brought to justice.
Crypto industry expansion provides additional opportunities to bad actors
James McDonald, CFTC Director of Enforcement in his recent official statement noted, that increasing “public awareness of the CFTC’s involvement in policing the virtual currency markets has, unfortunately, provided new opportunities for bad actors.”
Commenting on the aforementioned binary options scam case, McDonald emphasized that retail customers should exercise caution before buying or trading crypto on unfamiliar websites or social media.
The US commission repeatedly warned, that they do not collect taxes or fees and will continue to educate the investing public and aggressively pursue misconduct in this arena.
Think we missed something? Let us know in the comments section below.