The Commodity Futures Trading Commission (CFTC) sued four people and their company, Fundsz, for participation in a scam involving trading in digital currencies and precious metals.
Investigations are being conducted into allegations that Brian Early, from New Orleans, Louisiana, Rene Larralde, from Melbourne, Florida, Juan Pablo Valcarce, from West Melbourne, Florida, Alisha Ann Kingrey, from Franklin, Arkansas, and their unregistered entity Fundsz engaged in deceptive investment solicitations.
In the CFTC’s complaint submitted to the Middle District of Florida U.S. District Court, it claimed that the defendants defrauded investors by guaranteeing improbable profits based on a supposed “proprietary algorithm.”
The CFTC’s head of enforcement, Ian McGinley, stated that the organisation “continues to root out people who scam investors in the digital currency and precious metals markets.”
According to the regulatory agency, Fundsz lured customers with the promise of consistent weekly profits of 3% from trading in cryptocurrencies and precious metals.
They advertised Fundsz as a very lucrative business, guaranteeing a return of 1 million dollars on a $2,500 investment in less than 48 months. Additionally, they misrepresented Fundsz’s affiliation with charity groups in order to profit from the appeal of supporting deserving projects.
The regulatory agency further asserts that the plaintiffs used false weekly returns to entice over 14,000 people. The CFTC further claimed that Fundsz declared fictitious weekly returns to consumers while not trading customer funds.
Judge Wendy Berger of the U.S. District Court imposed a legal suspension earlier this month, seizing the defendants’ funds and appointed a temporary receiver. The date of the preliminary order trial is August 23.
The press release states, “In its ongoing litigation, the CFTC demands compensation to investors who have been deceived, repayment of ill-gotten gains, civil monetary repercussions, lifelong trading and registration bans, and an indefinite ban against additional breaches of the Commodity Exchange Act (CEA).”
The current legal action against Fundsz arrives as the CFTC and the SEC, two of the largest financial authorities in the US, have stepped up their efforts to target the cryptocurrency industry after the historic failure of the crypto exchange FTX.
The CFTC said earlier this year that it was suing Binance and its founder Changpeng “CZ” Zhao on claims that the cryptocurrency exchange provided illegal cryptocurrency derivative products in the US.
Similarly, the SEC filed a lawsuit against Binance in June and named its CEO as a defendant for their “blatant violation of the federal securities regulations,” bringing 13 allegations against the site, including running an unregistered exchange.
Apart from this, the commission has also taken legal steps against the cryptocurrency lending site Nexo and the digital currency exchanges Kraken and Bittrex.