Another Cryptocurrency scam has recently been terminated by the US Commodity Futures Trading Commission (CFTC) as it recently filed a civil enforcement action against a group of four individuals operating a fake digital asset scheme.
The CFTC’s complaint filed in the US District Court for The Southern District of Texas alleges that three Texas residents namely Rodrigo Jose Castro Molina, Cesar Castaneda, and Mayco Alexis Maldonado, along with Florida resident Joel Castaneda Garcia, took part in operating a fraudulent scheme to dupe customers off their funds via the Global Trading Club (GTC).
In between 2016 August and 2017 October, the defendants lied to their customers by telling them that the GTC had hired “master traders” with years of experience in crypto trading using professional trading systems with “cutting edge trading robots” to trade crypto assets for the customers “24 hours a day, 7 days a week.”.
They accused also falsely promised more returns if the customers increased their investment while offering them bonuses for referring the scheme to others as a part of a multi-level marketing scheme.
Furthermore, the defendants posted false trading statements to trick the unaware investors that they were making good profits.
The complaint alleges that the defendants duped more than 27 individuals off approximately $989,000.
Hence the CFTC has requested the court to order the defendants to pay civil monetary penalties.
“The CFTC seeks disgorgement of ill-gotten gains, civil monetary penalties, permanent registration and trading bans, and a permanent injunction against further violations of the Commodity Exchange Act and the Commission’s regulations, as charged.”
CFTC taking down Scams
The CFTC has been actively cracking down on several crypto-based scams and Ponzi’s. Last month, the watchdog fined $572 million in penalty and restitution from Benjamin Reynolds, the mastermind behind the $140 million crypto Ponzi dubbed Control-Finance.
A few months back, it charged two firms that duped investors of $15 million in a scam involving cryptocurrencies and Binary options.
Back in April, another company named Fintech Investment Group, Inc and Compcoin LLC was charged by the CFTC for duping victims of more than $1.6 million.