The U.S. Commodity Futures Trading Commission (CFTC) has filed a civil enforcement action against a Nevada crypto startup accused of defrauding its investors of at least $11 million. In a press release, the CFTC charged David Gilbert Saffron of solicitation and misappropriation through his startup Circle Society Corp. Saffron allegedly capitalized on the crypto popularity to recruit investors, lying to them that he could guarantee them huge returns through forex trading. The CFTC alleged that from at least December 2017, Saffron solicited over $11 million in BTC and fiat from 14 investors based in the U.S. He purportedly misled the investors into believing that he would trade off-exchange binary options on forex and crypto pairs. He also falsely claimed to trade for Mark Cuban, the billionaire owner of Dallas Mavericks. Saffron capitalized on the hype in the cryptocurrency industry at a time when most cryptos hit their record highs, promising his investors that he could guarantee rates of return up to 300%. Unsurprisingly, Saffron had no connection to Mark Cuban, nor did he have a way of generating such huge returns. Instead, the CFTC said he misappropriated the funds in various ways, including stashing away some of the crypto in his own wallet and using some of the money to pay back the early investors, in the manner of a Ponzi scheme. Saffron then lied to the investors to conceal the fact that he had defrauded them. In its filing with the U.S. District Court for the District of Nevada, the regulator is seeking full restitution for the defrauded investors as well as the disgorgement of the proceeds made from the venture. Additionally, the CFTC is seeking to have a permanent registration and trading ban on Saffron with a permanent injunction against future violations. Heath Tarbert, the CFTC Chairman warned investors against falling for crypto scams which he believes threaten the crypto industry. He stated, “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. America must be a leader in this space, and we will only succeed if these markets have integrity.” Earlier this year, the CFTC revealed that it was investigating BitMEX crypto exchange for allowing trading of cryptos before it officially registered its platform. While BitMEX didn’t allow U.S. clients on its platform, the CFTC alleged that it was possible that through the use of a VPN, the residents may have accessed the platform.