CFTC charges foreign exchange firm with fraud in a bitcoin-linked Ponzi scheme

From: RegTech Analyst

A foreign exchange firm used its investors’ money for personal expenses such as buying a BMW, according to charges brought out against it by the Commodity Futures Trading Commission (CFTC).

The civil enforcement action filed at the US District Court for the District of Colorado against Breonna Clark and Venture Capital Investments, a Colorado limited liability company, charges the parties with fraud and failing to register with the CFTC.

The CFTC alleged that the Clark and the company had set up a commodity pool and solicited Americans to trade both foreign currency contracts as well as bitcoin and other digital assets.

Of the $534,829 collected from the investors, $418,000 was used for personal means such as buying a BMW car and to make Ponzi-type payments to other pool participants, according to the CFTC.

Moreover, the regulator accused the defendants of misleading prospective pool participants by lying about their experience expertise, and investment track record while promising future profitability trading forex and digital assets.

The defendants are also accused of sending pool participants false account statements that suggested that there were profits being made through the trade when there was none.

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