Circle Society, a Nevada company, is in deep trouble with the federal government.
This week, the news broke that the CFTC was formally charging the company with various forms of fraud.
Options Hucksters Allegedly Raised $11 Million
The company as a whole and founder David Gilbert Saffron are charged with using fraudulent means to obtain funds and using them wrongly, as well as failing to properly register their shady endeavor.
Shady options firms and shady crypto firms are often very similar. Circle reportedly offered both investment classes.
The company’s assets have been frozen.
The CFTC press release quotes CFTC Chairman Heath P. Tarbert as saying:
“Digital assets and other 21st century commodities hold great promise for our economy. 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.”
The CFTC says Circle Society raised at least $11 million since December 2017.
The funds were then traded in a foreign binary options market, in an effort to profit from them. Investors were promised returns, one of the things that makes the offering a security in need of registration.
CFTC Continues Crypto Crusade
As part of the case, CFTC would like see the investors recompensated.
“In its continuing litigation, the CFTC seeks full restitution to defrauded investors, disgorgement of ill-gotten gains, civil monetary penalties, permanent registration and trading bans, and a permanent injunction against future violations of the Commodity Exchange Act and Commission regulations.”
Last month, the CFTC charged another person with a multi-million dollar Bitcoin fraud. A Pennsylvania man named Jon Thompson reportedly solicited millions for the alleged purchase of Bitcoin, but the agency says he never had any BTC.
Cryptocurrency possesses a wide regulatory footprint, with multiple agencies claiming some form of jurisidiction over the nascent blockchain indutry.
The CFTC is but one agency that a given crypto operation might run afoul of. There is also the US Treasury, the FBI, the SEC, the Secret Service, the DEA, FINCEN, and several other agencies and offices which have historically taken an interest in cryptocurrency.
