The US Commodity Futures Trading Commission (CFTC) has announced a lawsuit against the Circle Society, which is suspected of cryptocurrency fraud.
The CFTC has announced that it accuses the Circle Society (not related to the Circle cryptocurrency operator) and its owner David Gilbert Saffron of “extorting, misappropriating funds and violating binary options schemes in the amount of $ 11 million.”
According to the lawsuit, the defendants illegally misappropriated bitcoins and US dollars for at least $ 11 million received from investors in the United States to “trade OTC binary options to purchase foreign currencies and cryptocurrencies.” CFTC Chairman Heath P. Tarbert said:
“Organizers of fraudulent schemes like this not only deceive innocent people and lure them with hard-earned money, but also threaten to undermine the development of these innovative markets. America must be a leader in this area, and we will only succeed if these markets are honest. ”
The regulator claims that the defendants tricked at least 14 people into joining a pool managed by the Circle Society, a fraudulent organization created by Saffron, which guaranteed investment returns of up to 300% per annum. Saffron stored the participants’ bitcoins in a personal cryptocurrency wallet and used them to pay new victims according to the classical financial pyramid scheme.
The CFTC will seek financial penalties, damages and confiscation of illegal proceeds, as well as injunctions against the accused to trade and conduct financial transactions.
The US Commodity Futures Trading Commission is not the first time pursuing cryptocurrency scammers. So, in the summer, a Texas court after a CFTC lawsuit ordered the two defendants to pay $ 360,000 for managing a fraudulent cryptocurrency scheme. In March, the CFTC fined a startup for $ 990,000 for illegal operations with bitcoin, and in November last year, the Commission fined a cryptocurrency trader $ 1.1 million for fraud.
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