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CFTC Brings Charges Against Cryptocurrency Company for $147M

Tim Fries
Tim Fries Tim Fries is the cofounder of
Jun 21, 2019 2 min read
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The United States Commodity Futures Trading Commission (CFTC) has just filed a complaint against Control-Finance Limited and its CEO, a cryptocurrency company. The complaint alleges that the firm misappropriated $147M in Bitcoin. 

The CFTC has just extended its cryptocurrency crackdown. Control-Finance Limited and its CEO Benjamin Reynold, the defendants, have been charged with fraud. According to the complaint, they misappropriated around $147M.

1,000 People Scammed for $147M

According to the CFTC, Control-Finance and Reynolds were responsible for defrauding around 1,000 people out of around 22.8M BTC. These victims were requested to deposit their funds on the Control-Finance platform. The company promised returns on their investments. They essentially “guaranteed daily trading profits.” They also promoted themselves as veteran, expert cryptocurrency traders.

The CFTC says that Control-Finance was comparable to a ponzi scheme which operated from May 1st 2017 to Oct 31st 2017. The defendants afterwards closed their social media accounts and the company went dark, running away with around $150M.

The CFTC is seeking penalties for the fraudulent firm and relief for victims. Other penalities include permanent trading bans for those involved.

This is not the first time the CFTC has brought charges against fraudulent cases in the cryptocurrency world. In March of this year, the government agency also brought a suit against 1pool LTD for $990,000 in penalties over unregistered Bitcoin transactions. However, the CFTC has also been clear that they are not looking to suppress the development of crypto-assets.

Do you believe the CFTC will ramp up its efforts to fight fraud in the cryptocurrency industry? Let us know your thoughts in the comments below. 

Image courtesy of Corporate Compliance Insights. 

CFTC Crime Fraud Regulation
Tim Fries

Tim Fries

Author · Tokenist

Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird's US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.

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