CFTC is seeking $572 million in penalty and restitution from the owner of “fraudulent” bitcoin trading scheme Control-Finance.
August 21, 2020 | AtoZ Markets – The U.S. Commodity Futures Trading Commission (CFTC) is reportedly after the owner of a crypto scheme, which misled over a thousand of its investors and clients. It seeks $572 million in financial penalties and restitution.
Control-Finance owner gets $572m penalty from CFTC
Аccording to a recent report, the alleged Bitcoin trading pyramid Control-Finance has reportedly defrauded more than a thousand clients of the firm “since at least May 1, 2017”. Its owner Benjamin Reynolds is included in the file as a director of the enterprise and the main person behind the scam.
In the document filed with the New York Southern District Court on August 20, 2020, the CFTC explains that Reynolds did not appear, nor did he answer their complaint.
Allegedly, Control-Finance has used more than its website to attract customers. It also lured investors via social media – Facebook, YouTube, and Twitter.
The CFTC alleges that Reynolds has gained at least 22,858.822 BTC, worth $147 million at the time of the scam. At the time of writing, the BTC now has a value of about $270 million.
The defendants ceased operations in September 2017. They have reportedly removed their firm’s website from the Internet, plus every advertising publication in social media, while also ceasing payments to customers.
Per the filing, Reynolds will have to pay a civil monetary penalty of $429 million, plus $143 million in restitution.
Trading returns of 45% promised to the victims
According to the report, Reynolds has allegedly promised his customers trading returns of up to 45% per month. What happened is that the defendants did not make any trades on customers’ behalf, and did not earn any trading profits out of their Bitcoin investments whatsoever, as stated by the CFTC by that time.
As per the reported proposed judgment, aside from the financial penalty and restitution, Reynolds also faces some additional restrictions. According to Thursday’s default judgment, Reynolds will also be permanently prohibited from trading bitcoin.
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