$571 Million to be Paid over Bitcoin Scam

The Commodity Futures Trading Commission on 26th March 2021 declared that the U.S. District Court for the Southern District of New York entered a default judgment against Benjamin Reynolds, purportedly of Manchester, England, finding that he worked a fake plan to request bitcoin from members of the public and misappropriated customers of bitcoin. This case was brought in connection with the Division of Enforcement’s Digital Assets Task Force. 

The Commodity Futures Trading Commission (CFTC) is an independent agency of the US government made in 1974, that controls the U.S. derivatives markets, which incorporates futures, swaps, and certain kinds of options. The expressed mission of the CFTC is to promote the integrity, strength, and energy of the U.S. derivatives markets through sound guidelines. After the financial crisis of 2007–08 and since 2010 with the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFTC has been changing to carry more transparency and sound regulation to the multi-trillion dollar swaps market. 

Between May 2017 and October 2017, Reynolds utilized a public site, different social media accounts, and email communications to request at least 22,190.542 bitcoin, esteemed at around $143 million at that point, from in excess of 1,000 clients around the world, including at least 169 people living in the U.S. 

In addition to other things, Reynolds dishonestly addressed to clients that Control-Finance exchanged their bitcoin deposits in virtual currency markets and utilized particular virtual currency dealers who created ensured trading benefits for all clients. He likewise developed a detailed affiliate marketing network that depended on deceitfully encouraging to pay outsized referral profits, rewards, and bonuses to urge clients to allude new clients to Control-Finance. Truth be told, Reynolds made no trades for clients’ benefit, procured no trading benefits for them, and paid them no referral rewards or bonuses. While Reynolds addressed that he would return all bitcoin deposits to clients of Control-Finance by late October 2017, he never did and rather held the deposits for his very own utilization. Clients lost most of the entirety of their bitcoin deposits because of the scheme.

The court’s March 2, 2021 order expects Reynolds to pay almost $143 million in compensation to defrauded clients and a civil monetary penalty of $429 million.