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Mosaic Exchange Limited and Owner Accused of Running Fraudulent Crypto Scheme

Mosaic
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In this post:

  • CFTC has accused Mosaic Exchange Limited and its founder, Sean Michael, of orchestrating a fraudulent digital asset commodity scheme. 
  • They enticed investors by offering an algorithm with alleged profit margins of up to 60 percent per month.
  •  Investigation revealed that some of the funds entrusted to Mosaic were misappropriated and diverted for Sean Michael’s personal expenses.

In a shocking revelation, the Commodity Futures Trading Commission (CFTC) has accused Mosaic Exchange Limited, a crypto trading platform, and its founder, Sean Michael, of orchestrating a fraudulent digital asset commodity scheme. 

The alleged scheme, which spanned from February 2019 to June 2021, involved misleading claims about Mosaic’s assets under management, a fictitious profitable track record, and false partnerships with major crypto exchanges. This scheme has affected at least 17 individuals from various countries, who entrusted the platform with substantial amounts of Bitcoin and other cryptocurrencies, only to see their funds misappropriated.

During the period under investigation, Mosaic Exchange Limited and Sean Michael purportedly portrayed their platform as a crypto trading powerhouse, claiming to manage tens of millions of dollars in assets. They further enticed investors by offering an algorithm with alleged profit margins of up to 60 percent per month. The CFTC alleges that these representations were entirely false, constituting a deceptive facade that lured unsuspecting investors.

Additionally, the CFTC found that Mosaic and Michael had falsely claimed to have established partnerships with BitMEX and Binance, two prominent crypto exchanges. These purported partnerships were, in reality, nonexistent. The CFTC’s complaint asserts that Mosaic “never had a partnership or broker agreement with Binance” and did not possess a legitimate partnership agreement with BitMEX.

Furthermore, the investigation revealed that some of the funds entrusted to Mosaic were misappropriated and diverted for Sean Michael’s personal expenses, including expenditures related to his restaurant and travel.

A deceptive house of cards

CFTC Commissioner Kristin Johnson did not mince words when characterizing the alleged fraudulent activities of Mosaic Exchange Limited and its owner. She described the entire scheme as a “sham” and a “virtual house of cards.” This description aptly conveys the gravity of the accusations leveled against the platform and its founder.

Impact on Investors

The fallout from Mosaic’s alleged fraudulent activities has been deeply felt by investors, with at least 17 individuals from the United States and various other countries reportedly falling victim to the scheme. These individuals had entrusted the platform with “hundreds of thousands of dollars’ worth of bitcoin or other funds” with the expectation that their assets would be used for legitimate trading purposes. Instead, their funds were allegedly misappropriated, resulting in substantial financial losses.

The CFTC’s swift action in bringing this case to light underscores the commitment of regulatory authorities to safeguarding the interests of investors in the cryptocurrency space. The agency has taken legal action against Mosaic Exchange Limited and Sean Michael in response to these allegations. This move is part of a broader effort by regulatory bodies to maintain the integrity of the digital asset market and hold those engaged in fraudulent activities accountable.

The accusations against Mosaic Exchange Limited and its founder, Sean Michael, paint a grim picture of deception and misappropriation within the cryptocurrency trading world. Investors who had placed their trust in the platform now find themselves grappling with financial losses. 

The CFTC’s assertion that this was a “virtual house of cards” serves as a stark warning to those considering investments in the cryptocurrency space. It underscores the importance of due diligence and vigilance when navigating the complex and rapidly evolving world of digital assets.

As regulatory authorities continue to crack down on fraudulent activities in the crypto industry, it is hoped that such actions will deter bad actors and promote a more secure and transparent environment for investors. In the meantime, those who have fallen victim to such schemes are left to reckon with the consequences of their trust being misplaced in what now appears to have been a deceptive venture.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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