It’s no surprise that the top authorities are scrutinizing various fraud cases related to the crypto-industry – even though the prices of cryptocurrencies have drastically declined from 2017. One such instance is a “$11Million fraud case” that US CFTC recently uncovered.
The US Commodity Futures Trading Commission (CFTC) has recently filed a lawsuit against a Ponzi-like cryptocurrency scam. In a press release on Wednesday, the CFTC cited the complaint which was filed on Sept 30 and said that it charged David Gilbert Saffron, the principle of Nevada-based Circle Society. CFTC accused the firm and its founder of “fraudulent solicitation, misappropriation, and registration violations relating to an $11 million binary options scheme.”
The society, as well as the owner, are reportedly misappropriated the US citizens to con $11 million worth of BTC and USD since 2017. Notably, the investor’s fund was used to “trade off-exchange binary options on foreign currencies and cryptocurrency pairs, among other things”. A per the declaration, Saffron fleeced the amount from among 14 individuals by falsely committing 300 percent profit and by making false claim about his trading qualification. To that end, he urged them to invest in an investment pool created by his company, Circle Society.
The complaint says Saffron used investor’s million-dollar funds to his own crypto wallet as well as to other participants instead of serving what has been promised. Following the complaint, CFTC Chairman Heath Tarbert said;
“Digital assets and other 21st century commodities hold great promise for our economy. Fraudulent schemes, like that alleged in this case, not only cheat innocent people out of their hard-earned money, but they threaten to undermine the responsible development of these new and innovative markets.”
As for now, the court has ordered to preserve all the financial records from Saffron and Circle Society. Besides, it also ordered to freeze their assets. The regulaor is currently researching the possible ways to retrieve the funds contributed by US citizens to the Ponzi scheme.
A hearing over Saffron and Circle Society will take place on Oct.29.
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