CFTC Fines Commodity Pool Operator $1.9M Over Bitcoin Fraud Scheme

The US regulator CFTC fines commodity pool operator and its manager $1.9M over Bitcoin fraud scheme. The scheme involved fraudulent ad campaigns that have used false promises to trick clients into sending their Bitcoins to scammers.

24 July, AtoZ Markets – The US regulator, the US Commodity Futures Trading Commission has announced its final judgment order that has been issued by a New York federal court. The order settles court charges against a commodities pool operator that has been accused with operating a fraudulent scheme. 

CFTC Fines Commodity Pool Operator $1.9M Over Bitcoin Fraud Scheme

The CFTC has suspected that a Colorado businessman along with his UK-registered company have breached trading regulations and defrauding at least 600 customers. It is also reported that clients have lost more than $1.1 million. 

The New York federal court’s order also required defendants to pay more than $1.9 million in civil monetary penalties and restitution. 

The detailed complaint highlights that the fraud scheme has been active since April 2017. Reportedly, the scheme has involved fraudulent ad campaigns that have used false promises to trick clients to send their Bitcoins in order to participate in Binary Options trading pools and other investments. However, in reality, they were misled into investing in a Ponzi scheme. 

Earlier this January, the CFTC’s charges were unsealed in the Eastern District of New York. The charges appear to be against Dillon Michael Dean and his company, the Entrepreneurs Headquarters Limited. The latter is an entity that accepts investment in Bitcoins and then utilizes the money to trade various instruments.

CFTC does not guarantee full recovery of funds

The US regulator adds:

“The CFTC cautions that orders requiring repayment of funds to victims may not result in the recovery of any money lost because the wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure the wrongdoers are held accountable.”

In order to make up the illusion of stability, Dean and his company have allegedly prepared and distributed false account statements to participants. They have falsely claimed that they have received steady gains from trading commodity interests. 

The CFTC reports that Mr. Dean has obtained cryptocurrencies from investors that were supposed to be converted into fiat currency and then transferred into a pooled investment vehicle for trading commodities. Yet, the defendants never actually engaged in trading on behalf of their customers, according to the regulator. 

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