The U.S. Commodity Futures Trading Commission (CFTC) has filed a complaint against four individuals in connection with their roles in a BTC trading scam. The four touted their expertise in digital currency trading to lure investors, getting away with close to $1 million.
In the complaint filed at the Southern District of Texas, the CFTC charged three Texans and a Florida resident for fraudulently soliciting funds from customers to speculate on BTC price movements. The four are Rodrigo Jose Molina, Cesar Castaneda and Mayco Alexis Garcia from Texas and Florida resident Joel Castaneda Garcia.
The watchdog alleged that from at least August 2016 to October 2017, the four defendants falsely presented themselves as master traders who had years of experience trading digital currencies. The suspects allegedly claimed that they employed cutting edge trading bots to trade BTC for their clients “24 hours a day, 7 days a week.”
The suspects also told their clients that their earnings would increase based on their deposits and that they would get a bonus for referring others, the regulator said.
Their company, known as Global Trading Club, managed to raise $989,000 from at least 27 investors, the CFTC alleged.
“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.”
Global Trading Club had three levels for its investors, scam watch site BehindMLM previously reported. Those in the ‘entrepreneur’ level paid $250, with those in the ‘presidential’ and ‘VIP’ levels paying $1,000 and $7,000 respectively to join the company. It was heavily reliant on affiliate marketing, paying out earlier investors with money raised from new investors.
The CFTC has continued to crack down on fraudulent digital currency firms. This year, it has busted several scams, with the latest being fraudulent $33 million digital currency trading firm Q3. The regulator requested a New York court for an entry of default against the firm in June after it failed to respond to the lawsuit.
A few months prior, it had also requested for a default judgment against Benjamin Reynolds and his firm Control-Finance after failing to track the elusive fraudster.
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