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Washington, D.C. — The Commodity Futures Trading Commission today issued an order filing and settling charges against respondent SummerHaven Investment Management LLC, a Connecticut commodity trading advisor and commodity pool operator, for engaging in wash sales and non-competitive transactions on the InterContinental Exchange and various Chicago Mercantile Exchange exchanges, and for failing to diligently supervise its activities.
The order requires SummerHaven to pay a civil monetary penalty of $500,000 and to cease and desist from further violations of the Commodity Exchange Act and CFTC regulations, as charged.
Case Background
According to the order, SummerHaven engaged in multiple wash sales and non-competitive transactions while moving positions held by a client from one futures commission merchant (FCM) to another. Specifically, on July 2, 2018, SummerHaven placed offsetting buy and sell orders at each FCM, resulting in a series of pre-arranged offsetting trades in contracts for crude oil, heating oil, gasoil, live cattle, lean hogs, soybean meal, gasoline, cocoa, and cotton. In total, SummerHaven made more than 100 non-competitive prearranged trades with an aggregate value of more than $570 million. The order finds that SummerHaven failed in its supervisory duties because it did not have policies or procedures in place to prohibit wash sales or non-competitive transactions, and because the decision to execute wash sales and non-competitive transactions was reviewed and directed by senior supervisory management, including SummerHaven’s then-Chief Compliance Officer and then-Managing Partner.
The Division of Enforcement staff members responsible for this action are Kevin Samuel, Brian Hunt, Alison Wilson, Erica Bodin and Rick Glaser.
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Washington, D.C. — The Commodity Futures Trading Commission announced today that Judge John A. Gibney, Jr., of the U.S. District Court for the Eastern District of Virginia entered a Consent Order for Permanent Injunction, Restitution and Ancillary Equitable Relief against defendant Leonard J. Cipolla finding, among other things, that Cipolla fraudulently solicited individuals to place funds in a commodity pool to trade futures and options while misappropriating more than $5 million of the money he was given to trade. The order requires that Cipolla pay restitution of $5,102,283.51 and imposes permanent trading and registration bans.
The order resolves a CFTC action against Cipolla filed in the Eastern District of Virginia on September 19, 2019. [See CFTC Press Release No. 8020-19] Litigation against Cipolla’s company, Tate Street Trading, Inc., continues.
Case Background
According to the order, and as Cipolla admitted, from June 2009 through April 2019, Cipolla fraudulently solicited and received approximately $7,096,303 from pool participants in connection with futures and options pooled trading. The order also found that Cipolla misappropriated more than $2.5 million for business expenses or personal use and made more than $3 million in Ponzi-like payments to pool participants.
Despite having accepted approximately $7,096,303 from pool participants, the order found that Cipolla transferred only approximately $1,462,834 into Tate Street’s trading accounts. While Cipolla typically promised pool participants substantial returns, his actual trading between June 2009 and April 2019 was profitable in only two years and resulted in cumulative net losses of approximately $1,462,305. The order also found that Cipolla provided statements to pool participants that did not accurately reflect their trading results.
Parallel Criminal Action
In a separate, parallel criminal action, the U.S. Attorney for the Eastern District of Virginia previously announced that Cipolla pleaded guilty to mail fraud and acting as an unregistered commodity pool operator in connection with the scheme. On July 1, 2020, Cipolla was sentenced to 121 months in federal prison and ordered to pay restitution to victims. [See United States v. Leonard J. Cipolla, Case No. 3:19-cr-00126, ECF No. 40 (E.D. Va. Jul. 1, 2020)]
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.
The CFTC appreciates the cooperation and assistance of the U.S. Attorney’s Office for the Eastern District of Virginia in this matter.
The Division of Enforcement staff members responsible for this case are James A. Garcia, Michael Loconte, James Deacon, Erica Bodin and Rick Glaser.
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Customers and other individuals can report suspicious activities or information, such as possible violations of commodity trading laws, to the Division of Enforcement via a toll-free hotline 866-FON-CFTC (866-366-2382), file a tip or complaint online, or contact the Whistleblower Office. Whistleblowers are eligible to receive between 10 and 30 percent of the monetary sanctions collected paid from the Customer Protection Fund financed through monetary sanctions paid to the CFTC by violators of the Commodity Exchange Act.
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… explains Pablo Knobel, lead author of the article and member of the CTFC’s Environment and Human Health Lab (EH2 Lab) and the ICTA-UAB.
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Washington, D.C. — CFTC Commissioner Dan M. Berkovitz, the sponsor of the Energy and Environmental Markets Advisory Committee (EEMAC), today announced that the EEMAC will hold a public meeting on Thursday, June 3, 2021. The meeting will begin at 9:00 a.m. (EDT) and be held via videoconference in accordance with the agency’s implementation of social distancing due to the COVID-19 (coronavirus) pandemic.
The EEMAC will examine how derivatives markets can facilitate the transition to a low-carbon economy, including the status of carbon reduction through cap-and-trade and other carbon trading market mechanisms. The EEMAC will also hear a staff presentation on recent events in the energy markets.
“Climate change poses significant risks to our financial markets,” said Commissioner Berkovitz. “Derivative markets can help companies and other market participants manage these risks and move towards a low-carbon economy. I look forward to this EEMAC meeting, which will examine the current state of our domestic and international carbon markets and how derivatives can increase the stability and resilience of our financial system in the face of this threat.”
Members of the public may watch a live video of the meeting on cftc.gov or listen to a live, audio-only feed using the toll or toll-free numbers provided below. Persons requiring special accommodations to listen to the meeting because of disabilities should notify Abigail Knauff, the EEMAC Secretary, at (202) 418-5123 or at [email protected].
What:
Energy and Environmental Markets Advisory Committee Meeting
Location:
Virtual Meeting
Date:
June 3, 2021
Time:
9:00 a.m. – 2:00 p.m. EDT
Viewing/Listening Instructions: To access the live audio feed, use the dial-in numbers below. Call-in participants should be prepared to provide their first name, last name, and affiliation, if applicable. Materials presented at the meeting, if any, will be made available on cftc.gov.
Domestic Toll-Free:
1-877-951-7311
International Numbers:
International Numbers
Conference Passcode:
7500173
Members of the public can submit written statements in connection with the meeting by June 10, 2021. You may submit public comments on cftc.gov. Follow the instructions for submitting comments through the Comments Online process on cftc.gov. If you are unable to submit comments online, contact Abigail Knauff, EEMAC Secretary, via the contact information listed above to discuss alternate means of submitting your comments. Any statements submitted in connection with the committee meeting will be made available to the public, including publication on cftc.gov. Written statements should have “Energy and Environmental Markets Advisory Committee” as the title on any such statement.
The meeting agenda may change to accommodate other EEMAC priorities. For agenda updates and more information about this advisory committee, including its members and associate members, visit EEMAC.
There are five active federal advisory committees overseen by the CFTC. These bodies were created to provide the Commission with outside advice and recommendations on a variety of regulatory and market issues that affect the integrity and competitiveness of U.S. markets. These committees facilitate communication between the Commission and market participants, other regulators, and academics. The views, opinions, and information expressed by the advisory committees are solely those of the respective advisory committee and do not necessarily reflect the views of the Commission, its staff, or the U.S. government.
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Washington, D.C. — The Commodity Futures Trading Commission announced today that it has issued an Order of Registration to Mercado Mexicano de Derivados, S.A. de C.V. (MexDer), a Foreign Board of Trade (FBOT) located in Mexico City, Mexico, and a subsidiary of the Mexican Stock Exchange Group.
Under the order, MexDer’s members and other U.S. participants may enter orders directly into its trade matching system. MexDer satisfied CFTC requirements for FBOT registration by demonstrating, among other things, that it possesses the attributes of an established, organized exchange. It is subject to comprehensive oversight by its home country regulator whose supervision is comparable to that which the CFTC applies in its oversight of designated contract markets.
With the addition of MexDer, there are 23 FBOTs currently registered with the CFTC.
[…]
Washington, D.C. — The Commodity Futures Trading Commission’s Division of Data today announced the renewal of temporary no-action relief to entities submitting swaps for clearing by derivatives clearing organizations (DCOs) operating under CFTC exemptive orders or CFTC staff no-action relief (Relief DCOs). [See CFTC Press Release No. 7699-18)]
Today’s action renews relief for entities submitting such swaps for clearing (Relief DCO Counterparties) from obligations to terminate the original “alpha” swap and to report any swaps between the Relief DCO Counterparties and the Relief DCO. Relief DCOs are required to report such resulting swap data by the terms of their exemption or as condition to no-action relief. This action also provides relief for counterparties to report certain primary economic terms data fields for swaps intended to be cleared by a Relief DCO as a cleared swap.
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Washington, D.C. — The Commodity Futures Trading Commission today announced that the U.S. District Court for the Western District of Washington entered a consent order against Aaron Michael Scott of Portland, Oregon for fraud and misappropriation in connection with a precious metals scheme run by Scott and his now defunct company, BMC Worldwide, Inc. (d/b/a Blue Moon Coins). The order requires Scott to pay $1,381,461.86 in restitution to defrauded customers. Additionally, the order prohibits Scott from further violations of the Commodity Exchange Act and CFTC Regulations and permanently bans him from registering with the CFTC and trading in any commodity interests.
Case Background
The order resolves a CFTC action against Scott for engaging in fraud and misappropriation in connection with a gold-and-silver scheme from at least October 2013 through April 2014. The case was filed on October 3, 2018. [See CFTC Press Release No. 7822-18]
The order finds that Scott and BMC fraudulently represented that BMC was a highly successful precious metals firm. As detailed in the order, Scott and BMC persuaded customers to purchase gold and silver from BMC by claiming that, among other things, they maintained an inventory of precious metals in stock and would fulfill a customer’s order from that inventory or would purchase precious metals from a supplier upon receipt of payment.
The order also states that Scott and BMC did not maintain an inventory of precious metals sufficient to fulfill customer orders and, in many cases, made no effort to secure the precious metals needed to fulfill customer orders. Instead, they misappropriated the vast majority of customer funds and used them to pay BMC’s operating expenses, invest in other businesses, pay unrelated debts, and refund disgruntled customers or fulfill other customer orders in the nature of a Ponzi scheme.
Parallel Criminal Action
In a separate, parallel criminal action, Scott pleaded guilty to wire fraud on November 1, 2018. [United States v. Scott, No. CR18-5500-RBL (W.D. WA.)] The court sentenced Scott to four years in prison and three years of supervised release on April 5, 2019. The CFTC appreciates the assistance of the U.S. Attorney’s Office for the Western District of Washington.
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 wrongdoers are held accountable.
The Division of Enforcement staff members responsible for this case are Stephen Turley, Jenny Chapin, Brett Shanks, Jeff Le Riche, Christopher Reed, and Charles Marvine, as well as former staff members James Humphrey, Peter Riggs, and Jo Mettenburg.
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CFTC’s Precious Metals Customer Fraud Advisory
The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including the Precious Metals Fraud Advisory, which alerts customers to precious metals fraud and lists simple ways to spot precious metals scams.
Also, before investing or trading with a firm, check the firm’s registration status and disciplinary history, if registered, with the National Futures Association. A company’s registration status can be found at: www.nfa.futures.org/basicnet.
Customers and other individuals can report suspicious activities or information, such as possible violations of commodity trading laws, to the Division of Enforcement via a toll-free hotline 866-FON-CFTC (866-366-2382), file a tip or complaint online, or contact the CFTC Whistleblower Office at whistleblower.gov. Whistleblowers are eligible to receive between 10 and 30 percent of the monetary sanctions collected paid from the CFTC Customer Protection Fund financed through monetary sanctions paid to the CFTC by violators of the Act.
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Washington, D.C. — The Commodity Futures Trading Commission today announced an award of approximately $3 million to a whistleblower whose specific, credible, and timely tip led the CFTC to open an investigation and ultimately bring a successful enforcement action.
With this award, the CFTC has granted whistleblower awards associated with enforcement actions that have resulted in monetary sanctions totaling more than $1 billion.
“This milestone illustrates that the CFTC’s Whistleblower Program has had a tremendous impact on increasing our enforcement efforts in its short history,” said CFTC Acting Director of Enforcement Vincent McGonagle. “In many of our actions, whistleblowers’ assistance has been critical in revealing wrongdoing, and their tips ultimately conserve the CFTC’s time and resources,” McGonagle continued.
About the CFTC’s Whistleblower Program
The CFTC’s Whistleblower Program was created under Section 748 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Since issuing its first award in 2014, the CFTC has awarded approximately $123 million to whistleblowers. The CFTC issues awards related not only to the agency’s enforcement actions, but also in connection with actions brought by other domestic or foreign regulators if certain conditions are met.
The Commodity Exchange Act (CEA) provides confidentiality protections for whistleblowers. Regardless of whether the CFTC grants an award, the CFTC will not disclose any information that could reasonably be expected to reveal a whistleblower’s identity, except in limited circumstances. Consistent with this confidentiality protection, the CFTC will not disclose the name of the enforcement action in which the whistleblower provided information or the exact dollar amount of the award granted.
Whistleblowers are eligible to receive between 10 and 30 percent of the monetary sanctions collected. All whistleblower awards are paid from the CFTC Customer Protection Fund, which was established by Congress, and is financed entirely through monetary sanctions paid to the CFTC by violators of the CEA. No money is taken or withheld from injured customers to fund the program.
* * * * *
Anyone with information related to potential violations of the CEA or the CFTC’s rules and regulations can submit a tip electronically by filing a Form TCR (Tip, Complaint or Referral) online at https://whistleblower.gov/overview/submitatip.
To learn more about the CFTC’s Whistleblower Program, please visit the program’s website at https://www.whistleblower.gov/.
[…]
Washington, DC — The Commodity Futures Trading Commission today announced that the Division of Data, the Division of Market Oversight, and the Division of Clearing and Risk have provided no-action relief to KalshiEX LLC, a designated contract market, and LedgerX, LLC, a derivatives clearing organization, from reporting to swap data repositories, data for binary option transactions executed on or subject to the rules of Kalshi and cleared by LedgerX. The no-action relief also exempts Kalshi and LedgerX from certain related recordkeeping requirements, and is consistent with staff-level relief previously provided to other similarly situated designated contract markets and derivatives clearing organizations.
The relief provides reporting and recordkeeping relief in narrow circumstances to a limited universe of recipients and subject to a number of conditions, including that:
All binary options covered by the relief are fully collateralized, as the term is defined in CFTC regulations;
Kalshi clears all binary options through LedgerX and LedgerX clears all of Kalshi’s binary options;
Kalshi publishes on its website certain transaction information promptly after execution;
Kalshi provides the CFTC with all transaction information as required in CFTC Regulation 16.02;
Kalshi and LedgerX each comply with all remaining applicable reporting and recordkeeping requirements;
No Kalshi participant clears a product covered by the relief through a third-party clearing member; and
Kalshi and LedgerX continue to keep records not included in the relief open to inspection upon request by any of several regulators, including the CFTC, and provide copies of such records on the request of such regulators, at the expense of Kalshi or LedgerX, as applicable.
[…]
Washington, D.C. — The Commodity Futures Trading Commission announced today that it has issued an order filing and settling charges against Jozef Gherman of Florida and J Squared LLC, a Florida limited liability company, for making misleading statements or omitting material facts in connection with soliciting more than $300,000 from over 40 individuals to invest in digital assets. Gherman was an employee and one of the founders of J Squared and was its principal owner and CEO.
The order requires Gherman and J Squared to pay a $150,000 civil monetary penalty, with the amount to be paid by each capped at $75,000, and any post-judgment interest. The order also requires Gherman and J Squared to pay $247,110 in restitution, with the amount to be paid by each capped at $123,555, and any post-judgment interest. In addition, the order imposes a 10-year ban on Gherman and J Squared from trading on or subject to the rules of any CFTC-registered entity, and from engaging in any activities requiring registration with the CFTC.
“The CFTC will continue to work to protect participants from false and misleading solicitation practices and hold those engaging in such practices, including individuals, accountable,” said Acting Director of Enforcement Vincent McGonagle.
Case Background
According to the order, from at least June 2017 through at least June 2018, Gherman and J Squared solicited and accepted funds in the form of digital currency and fiat cash from over 40 customers to trade virtual currencies, including Bitcoin, Bitcoin Cash, Ether and other alternative coins.
They recklessly made false and misleading statements of material fact or omitted to state material facts which induced individuals to invest with J Squared, invest additional funds with J Squared, or continue to hold their investments with J Squared. They also made misleading statements regarding J Squared’s growth and success as a company, its expanding clientele, and its ability to be selective in acquiring customers. Furthermore, Gherman and J Squared recklessly made materially false and misleading statements and omissions regarding the likelihood of profit and the risk of loss. Customers suffered losses totaling over $247,000.
The CFTC cautions victims that restitution orders may not always result in the recovery of money lost, because wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure wrongdoers are held accountable.
The Division of Enforcement staff members responsible for this case are Patrick Daly, Trevor Kokal, Christopher Giglio, Yusuf Capar, Patryk J. Chudy, Lenel Hickson, Jr., and Manal M. Sultan.
[…]
Washington, D.C. — The Commodity Futures Trading Commission today announced the Market Participants Division (MPD) and the Division of Market Oversight (DMO) are providing a continuation of certain parts of the temporary no-action relief issued in response to the COVID-19 (coronavirus) pandemic that is scheduled to expire on April 15, 2021. Any prior relief not extended by CFTC Staff Letter No. 21-10 has expired or will expire pursuant to the terms of the applicable CFTC Staff Letter.
Subject to certain conditions, CFTC Staff Letter No. 21-10 provides the following relief, expiring on September 30, 2021:
Relief from Introducing Broker (IB) Registration and Location Requirements for Floor Brokers (FBs). MPD is providing a limited continuation of relief from IB registration and location requirements for FBs that normally operate on an exchange’s trading floor and/or other designated premises from which customer orders may be placed.
Relief for Designated Contract Markets (DCMs). DMO is providing a limited continuation of targeted no-action relief for DCMs from certain CFTC regulations related to real-time market monitoring requirements as a result of the displacement of FBs from the trading floor.
On March 17, 2020, targeted, temporary relief was granted to a broad spectrum of market participants to support orderly trading and liquidity as they implemented social distancing measures. [See CFTC Press Release Nos. 8132-20 and 8133-20] To date, the CFTC and CFTC staff have taken more than 20 actions to provide market participants temporary, targeted relief in response to the pandemic. A comprehensive list of these actions can be found at cftc.gov/coronavirus.
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Washington, D.C. — The Commodity Futures Trading Commission announced today that the U.S. District Court for the Middle District of Florida entered an order granting the CFTC’s motion for entry of default judgment against defendants The Alista Group, LLC of Orlando, Florida and other locations, and Luis M. Pineda Palacios, a/k/a Luis Pineda of Orlando, Florida. The order finds that the defendants failed to answer the CFTC’s complaint which alleged that Alista and Pineda had engaged in precious metals fraud and illegal, off-exchange precious metals sales to retail customers.
The order requires Alista to pay $560,540.95 in restitution and a civil monetary penalty of $1,681,622.85. The order also requires Pineda to pay restitution in the amount of $77,500, and a civil monetary penalty of $370,484. In separate, concurrently issued orders, the court also permanently enjoined Alista and Pineda from engaging in conduct that violates the Commodity Exchange Act, from registering with the CFTC, and from trading in any CFTC-regulated markets.
The CFTC continues to engage in litigation with two remaining defendants as part of a 2020 enforcement action against Marvin W. Courson III (Courson) and Christopher A. Kertatos. [See CFTC Press Release No.8204-20]
Case Background
According to the complaint, from July 2016 through at least January 2018, Alista engaged in a scheme to defraud customers located throughout the U.S.in connection with precious metals transactions. These transactions constituted illegal, off-exchange retail commodity transactions. Notably, Alista’s leveraged precious metals transactions never resulted in the actual delivery of the full amount of metal purchased by its customers.
The complaint further alleges that, in connection with this activity, Alista defrauded these customers by misappropriating their funds to speculate in precious metals for Alista’s own account, pay Alista’s business expenses, and make Ponzi-style payments to customers who sought to cash out some of their purported holdings. In addition, Pineda individually defrauded at least some of Alista’s customers by using an individual bank account under his personal control to accept Alista customer funds and then misappropriate those funds to pay for personal and other expenses unrelated to leveraged precious metals transactions on behalf of Alista’s customers.
The CFTC cautions victims that restitution orders may not always result in the recovery of money lost, because wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure wrongdoers are held accountable.
The CFTC thanks the U.S. Secret Service, the Florida Office of Financial Regulation, and the Lee County (Florida) Sheriff’s Office for their assistance in this matter.
Division of Enforcement staff members responsible for this action are Alan Edelman, Michelle Bougas, Erica Bodin, Alison B. Wilson and Rick Glaser.
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Washington, D.C. — The Commodity Futures Trading Commission’s Market Participants Division (MPD), Division of Clearing and Risk (DCR), Division of Data (DOD), and Division of Market Oversight (DMO) today announced they are issuing no-action relief, effective immediately, to provide greater certainty to the global marketplace in connection with the withdrawal of the United Kingdom from the European Union, known as Brexit.
The Divisions are providing two no-action relief positions, subject to certain specified conditions. MPD, DCR, DOD and DMO are providing relief for U.S. swap dealers (SDs) from certain transaction-level requirements for certain swaps between their foreign branches and non-U.S. persons. MPD is also providing relief to SDs by allowing them to utilize existing relief provided in CFTC Staff Letter No. 20-39 in lieu of the required comparability determination under certain exceptions in the Commission’s recent cross-border final rule.
The CFTC has taken a number of other steps to facilitate a smooth transition upon the withdrawal of the UK from the EU. For example, in February 2019, the CFTC, the Bank of England and its Prudential Regulation Authority, and the Financial Conduct Authority issued a statement regarding the continuity of derivatives trading and clearing post-Brexit. [See CFTC Press Release No.
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Washington, D.C. — The Commodity Futures Trading Commission today announced that following a hearing on the merits, the U.S. District Court for the District of Nevada entered a default judgment against defendants David Gilbert Saffron, an Australian citizen residing in Las Vegas, Nevada and/or Los Angeles, California, and Circle Society, Corp., a Nevada corporation, for a cryptocurrency fraud and misappropriation scheme.
The court’s March 29, 2021 final judgment requires defendants Saffron and Circle Society, jointly and severally, to pay restitution of $14,841,280 to defrauded pool participants, disgorgement of $15,815,967, and a civil monetary penalty of $1,484,128. The final judgment also permanently enjoins the defendants from engaging in conduct that violates the Commodity Exchange Act and CFTC regulations, registering with the CFTC, trading in any CFTC-regulated markets, and trading in any commodity interest for himself or others.
The court articulated its findings and conclusions on the record during a hearing on the merits of the CFTC’s motion for default judgment.
The court found in its final judgment that the defendants’ ongoing failure to offer any colorable defense to the CFTC’s claims, along with the defendants’ rehashed excuses for their continued failure to comply with the court’s orders throughout the litigation, animate the CFTC’s default-judgment arguments and underlie the court’s conclusion that default judgment is warranted. Previously, the court granted the CFTC’s motion for sanctions arising from the defendants’ contempt and awarded the CFTC attorneys’ fees and expenses.
The final judgment is the result of a September 30, 2019 enforcement action brought by the CFTC charging the defendants with fraudulent solicitation, misappropriation, and registration violations. [See CFTC Press Release No. 8053-19]
Case Background
In its motion for default judgment, the CFTC presented evidence that from December 2017 through the present, Saffron fraudulently solicited and accepted at least $15,815,967 worth of Bitcoin and U.S. dollars from at least 179 individuals to trade off-exchange binary options on foreign currencies (forex) and cryptocurrency pairs, among other things. During the early stages of his activity, Saffron created Circle Society and used this entity to perpetrate his fraud. According to the CFTC complaint and motion for default judgment, Saffron and Circle Society solicited members of the general public to participate in a commodity pool operated by Circle Society by making false claims of Saffron’s trading expertise and guaranteeing rates of return up to 300%. Rather than using pool participants’ funds to trade as promised, the defendants misappropriated funds, including by holding participants’ funds in Saffron’s personal electronic cryptocurrency wallet and by using funds to pay some participants with the funds of other participants, in the manner of a Ponzi scheme. The majority of participants, however, have been unable to obtain a return of any of their funds despite their repeated demands.
The CFTC cautions victims that restitution orders may not result in the recovery of any money lost because the wrongdoers may not have sufficient funds or assets.
The CFTC appreciates the assistance of the U.S. Attorney’s Office for the District of Nevada and the North Carolina Secretary of State’s Securities Division.
Division of Enforcement staff members responsible for this case are Danielle Karst, Timothy J. Mulreany, George H. Malas, Hillary Van Tassel, and Paul G. Hayeck.
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