CFTC Files Lawsuit Against Fundsz Operators

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  • Defendants solicited participants with claims of high returns using a “proprietary algorithm” for trading cryptocurrencies and metals
  • They pitched a $2,500 investment in Fundsz which would grow to $1 million in 48 months, along with false charitable ties
  • The complaint alleges Fundsz didn’t trade customer funds, fabricating returns, and CFTC warns recovery may be uncertain

The Commodity Futures Trading Commission (CFTC) has initiated legal proceedings against the Florida-based crypto project Fundsz, accusing its operators of “fraudulent solicitation” in relation to cryptocurrency and precious metals trading. The four individuals allegedly enticed potential investors with unrealistic promises of returns, all supposedly backed by a “proprietary algorithm.” In actual fact, the returns were entirely fictional and no trading was done whatsoever, with the scheme being nothing but a plain old crypto investment scam.

“Proprietary Algorithm” Didn’t Exist

According to the CFTC, the four defendants, two Floridians, and Arkansan and a Louisianan, engaged in a series of deceptive practices spanning from around October 2020 until very recently. The allegations center around the defendants’ solicitation of participants through enticing claims about Fundsz’s performance.

The complaint outlines that the defendants promoted Fundsz as a vehicle that historically generated impressive returns of over 3% per week through the utilization of a so-called “proprietary algorithm.” This algorithm was allegedly used for trading not only cryptocurrencies but also precious metals and other elements, which the defendants referred to as their unique “secret sauce.”

$2,500 to $1 Million

The CFTC further alleges that the defendants asserted a track record of “on time and accurate payments” over a span of seven years. A particularly compelling claim they made was that a single contribution of $2,500 to Fundsz could transform into a staggering $1 million within just 48 months, requiring no further additional deposits.

Additionally, the complaint brings attention to the defendants’ strategic presentation of Fundsz as a philanthropic endeavor. Utilizing the tagline “Fundsz For Your Cause,” the defendants allegedly misled participants into thinking that contributing to Fundsz would have a positive impact on various charitable initiatives, such as clean water, humanitarian efforts, healthcare, education, and disaster relief.

These tactics reportedly proved successful, leading the defendants to claim a substantial participation count of more than 14,000 individuals. However, the CFTC’s investigation disputes the legitimacy of these claims. As per the complaint, Fundsz did not actually engage in any trading of customer funds, rendering any purported customer gains as mere illusions. The defendants allegedly fabricated weekly returns to present to their customers.

While the CFTC states that it seeks the return of the funds, it also warns that there may not actually be much left to recover.