CFTC crypto investigation unearthed a ponzi scheme in Nevada

CFTC crypto investigation unearthed a ponzi scheme in Nevada

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A recent CFTC crypto investigation has unearthed a purported scam. An alleged foreign exchange and cryptocurrency firm have been charged by the Commodity Futures Trading Commission (CFTC) in the United States for running a Ponzi scheme.

A complaint was filed with the CFTC on September 30, after which a press release was issued for clarification. It stated that CFTC had charged Circle Society, a firm based in Nevada, and its owner David Gilbert for conducting fraud with investor funds. He has solicited the funds and undertook misappropriation along with registration violations.

CFTC crypto investigation reveals a dark side to crypto

Saffron used his firm to provide forex and cryptocurrency binary options. He was undertaking this endeavor since 2017 and has so far collected eleven million dollars ($11M) from his gullible investors. The complaint mentions in detail how Saffron has sought funds from fourteen people fraudulently.

Saffron convinced them to join his investment pool by making false promises. He promised his investors profits of more than three hundred percent. He presented himself as an ace investor with vast trading expertise.

However, he did not undertake any binary options trading himself as promised. Instead, he transferred the money collected from participants into his crypto wallet and then paid the remaining participants. This was just another classic pyramid payment scheme where old participants are paid initially with money from new participants. Over time the misappropriation of the funds was unearthed in the Ponzi scheme.

Fraudulent schemes are being wiped out carefully

CFTC Chairman Heath Tarbert commented that cryptocurrencies hold great promises for the future of our economy. Such fraudulent schemes must be identified and weeded out instantly with CFTC crypto investigation. They not only cheat innocent investors but also threaten the growth of innovative products like cryptocurrency markets.

A court order has frozen all the assets under Circle Society and Saffron’s accounts. The financial records related to the society has also been preserved. The case is set to be heard again on October 29 this month.

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Gurpreet Thind

Gurpreet Thind is pursuing Masters in Electrical Engineering at University of Ottawa. His scholarly interests include IT, computer languages and cryptocurrencies. With a special interest in blockchain powered architectures, he seeks to explore the societal impact of digital currencies as finance of the future. He is passionate about learning new languages, cultures and social media.

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