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May 12, 2021 by |

San Diego CFTC Whistleblower Attorney: Fraudulent Trading In Bitcoin

ATTORNEY NEWSLETTER

CFTC Alleges $143 Million In Bitcoin Fraud

British Trader Collected 22 Million In Bitcoin From 169 U.S. Customers

Victims Lost All Their Bitcoin As A Result of Scheme

The U.S. Commodities Futures Trading Commission (CFTC) polices trading in virtual currencies also referred to as digital currency or digital assets.   The 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), Pub. L. 111-203, established a whistleblower program within the CFTC to encourage individuals with information of trading fraud to report the fraud to the agency and potentially receive a reward for that information if the agency successfully recovers from the alleged wrongdoer. See 7 U.S.C. § 26 et seq.  Fraudulent trading can occur in equities trading or trading in futures, options, commodities and currencies including virtual or digital currencies.  If you have information of any form of virtual currency, commodities or options trading fraud call Evans Law Firm, Inc. We can assemble your information in the form required by the CFTC for investigation and possibly a reward if the agency completes a successful enforcement action including recovery of civil penalties or disgorgement of illegal gains.  If you have information of any form of commodities, options or virtual currency trading fraud, call us today at (415)441-8669 or toll free at (888)503-8267.

Allegations Against Bitcoin Trader

According to a recent CFTC announcement, [1] the agency has charged a virtual currency trader based in England alleging that he operated a fraudulent scheme to solicit bitcoin from members of the public and misappropriated customers’ bitcoin. The agency will require the trader to pay nearly $143 million in restitution to defrauded customers and a civil monetary penalty of $429 million.   The information provided to the agency alleged that between May 2017 and October 2017,  the trader used a public website, various social media accounts, and email communications to solicit at least 22,190.542 bitcoin, valued at approximately $143 million at the time, from more than 1,000 customers worldwide, including at least 169 individuals residing in the U.S.   According to allegations in the complaint, the trader falsely represented to customers that he employed specialized virtual currency traders who would generate guaranteed trading profits for all customers.   The trader allegedly also constructed an elaborate affiliate marketing network that promised outsized referral profits, rewards, and bonuses to encourage customers to refer new customers. In fact, according to the complaint, the trader made no trades at all on customers’ behalf, earned no trading profits for them, and paid them no referral rewards or bonuses. Instead, the trader allegedly retained the bitcoin deposits for his own personal use. Customers lost most or all of their bitcoin deposits as a result of the scheme, according to the complaint.

CFTC Rewards In Covered Actions

Individuals who provide the CFTC with information of this or any other form of trading fraud are entitled to a reward. A CFTC case begins with a TCR (“Tip, Complaint, or Referral”) Form filed with the Commission. The Commission recommends that whistleblowers seek the counsel of experienced CFTC/SEC whistleblower attorneys to assist them in the process of submitting a TCR form. This will ensure they take the proper steps to remain anonymous and qualify for a whistleblower award.  Once the CFTC determines a fine or obtains any recovery based on the information contained in the TCR then submit a Form WB-APP with the CFTC to claim a reward for the information they provided that led to the successful enforcement action.

Contact Us

Ingrid M. Evans at Evans Law Firm, Inc. can represent individuals with information of any form of trading fraud actionable before the CFTC.  She can be reached at (415) 441-8669, or toll free at (888)503-8267 or by email at <a href=”mailto:info@evanslaw.com”>info@evanslaw.com</a>.  Ingrid also represents whistleblowers in cases involving the False Claims Act, offshore tax avoidance schemes or other tax fraud before the Internal Revenue Service, and bank fraud under the Financial Reform, Recovery, and Enforcement Act (FIRREA/FIAFEA),

[1] Evans Law Firm, Inc. was not involved in this case in any way.

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