2018-7-26 20:23 |
In a press release, the Commodity Futures Trading Commission (CFTC) announced that it has successfully prosecuted another fraudulent cryptocurrency case against Dillon Michael Dean and his UK-registered company, The Entrepreneurs Headquarters Limited (TEH), for operating an illegal Bitcoin investment pool. As a result, the US District Court for the Eastern District of New York ordered the accused to pay over $1.9 million in restitution and civil monetary penalties.
Bitcoin Fraud Case Brought to LightIn an Order and Default Judgment, Judge Sandra J. Feuerstein of the New York federal court held that Dean and the company TEH had been engaged in a fraudulent Bitcoin scheme. The court found that defendants sought Bitcoins from people and misrepresented that funds of customers will be pooled and put in investments, such as in binary options. The court also found that the funds of pool participants were misappropriated and that TEH did not register with the CFTC as a Commodity Pool Operator (CPO), nor did Dean seek Associated Person of a CPO registration.
The Order further unearthed that the defendants solicited Bitcoins worth at least $499,264.04 from 127 people between April 2017 and January 18, 2018 (date of filing of the CFTC complaint). During this period, the defendants were not registered with the agency in any capacity. The defendants, during this time, promised the investors that they would convert their Bitcoins to fiat and invest on their behalf in a pooled vehicle that trades in commodities. They also promised a binary options trade on an online exchange that is designated as a contracts market by the federal watchdog.
Customers Were Fooled With the Promise of High ReturnsPromises of high return and trading expertise were used by the defendants to fool the investors. They also used social media channels like YouTube, Facebook, etc. to seek investments. These promotions claimed that Dean has “strong skills” in binary options and that they were already generating high returns on the investments. All these profits were, however, fictitious. Consequently, defendants were ordered to pay customer victims restitution in an amount totaling $432,184.79, as well as civil penalties amounting to $1,497,792.12. Apart from this, defendants have been banned from trading and registration permanently.
However, the CFTC warns the customer victims that despite the order for repayment, they may not be able to recover any amount due from defendants as defendants may not have enough assets to liquidate.
Illegal Bitcoin Pool Operator Ordered to Pay Almost $2 Million in a Case Filed by CFTC was originally found on [blokt] - Blockchain, Bitcoin & Cryptocurrency News.
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