The U.S. Commodity Futures Trading Commission (CFTC) has been cracking down on people who have been abusing the crypto space to illegally obtain money. The agency has filed its first complaint against a UK based company for stealing more than 22,800 Bitcoin through its operations by promising investors huge returns on their investments.
Sole director Benjamin Reynolds of Control-Finance LTD allegedly scammed more than 1,000 US citizens out of 22,800 BTC in an elaborate Ponzi scheme, where he would then transfer Bitcoin to crypto wallets stored in several different countries.
A Rather Murky Business
According to the CFTC, Reynolds would ask new clients to buy Bitcoin with cash – something LocalBitcoins has now stopped users from doing – and then send it over to the “company” account. He then allegedly sent a portion of the deposit to old investors under the guise of trading profits, while the rest went to his off-shore crypto wallets – never to be seen by the investors again. Reynolds would then issue the investors with fake documents purporting that they actually had a balance.
Abusing People’s Appetite for Bitcoin
A lot of investors into Reynolds’ Ponzi scheme are likely rather angry, and not only because they lost their money. The Control-Finance LTD scam ran from May 1, 2017, to October 30, 2017 – a time period when Bitcoin’s price was increasing with every passing second. Reynolds cashed in on the public’s appetite for Bitcoin and the chance to make a lot of cash quickly, and abused it. The move was cold, calculated, and predatory, leaving most of the investors with no savings.
Cracking Down on Similar Issues
The CFTC has vowed to continue policing the Bitcoin and crypto trading world, and it’s helping Bitcoin become more accepted in the US. Earlier this year, the CFTC slapped a Bitcoin trader with 2 years in jail after he made a series of illegal transactions with his client’s funds. In addition to this, the agency also caught a scammer promising to sell high-tech backpacks via crowdfunding campaigns. He was caught after misappropriating more than $800,000 in funds from investors.
The CFTC is stomping down on people using the crypto industry to scam people out of their hard-earned funds. If the prosecution is successful, Reynolds could be looking at some serious time behind bars for his crimes – not to mention having to pay back investors millions of dollars.
