The Commodity Futures Trading Commission (CFTC) has sued five individuals for falsely promoting bitcoin and cryptocurrency trading services, thereby deceiving unsuspecting investors.
The defendants in the case, according to the CFTC, primarily targeted Spanish-speaking users.
The majority of the victims were from Spanish speaking communities
The CFTC alleged that five people — David Carmona, Juan Arellano Parra, Moses Valdez, David Brind and Marco A. Ruiz Ochoa — solicited money from clients to help them trade bitcoin and other cryptocurrencies, but ended up embezzling users’ funds.
The defendants jointly ran a company called Icomtech, which was supposed to be a cryptocurrency business venture. According to the CFTC, between 2018 and 2019, Icomtech reported that customers will receive between 0.9% and 2.8% of daily returns from cryptocurrency trading. The fraudulent scheme also promised to double clients’ investments between four and eight months.
However, the regulator claimed that Icomtech, along with the aforementioned defendants, did not use the funds received to trade bitcoin or cryptocurrencies, and the scheme did not fulfill the above promises.
The CFTC also reported that Icomtech agents solicited funds worth “hundreds of thousands of dollars” from more than 170 people in the United States and other countries. Moreover, most of the customers came from Spanish-speaking communities.
In addition to CFTC enforcement actions, the US Attorney’s Office for the Southern District of New York (SDNY) also charged the five defendants with wire fraud in October 2022 in connection with the fraudulent Icomtech project.
The CFTC is no more currency-friendly than the Securities and Exchange Commission
The latest enforcement action comes shortly after the CFTC registered its highest-profile bitcoin fraud case involving a $3.4 billion fine. The case involved a South African CEO who ran an unregistered commodity group to order bitcoin from people and also embezzled customers’ funds.
Meanwhile, CFTC Commissioner Kristi Goldsmith Romero said he was It is impossible to monitor it All the scams going on in the cryptocurrency space, because it was a lot. According to Romero, 20% of the agency’s portfolio is made up of crypto cases, including lawsuits against crypto giant Binance and bankrupt FTX.
The CFTC commissioner also stated that the regulatory agency should not be seen as a “more friendly regulator” towards the cryptocurrency sector, compared to the Securities and Exchange Commission (SEC), which has taken a more aggressive approach towards the industry in recent times.
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