The US Commodity Futures Trading Commission (CFTC) sued the British cryptocurrency and investment company Control-Finance Limited, as well as its founder Benjamin Reynolds, with charges of creating a financial pyramid. It is reported by CoinDesk .
In particular, the company and its founder are accused of misappropriating 22,858 BTC worth at least $ 147 million from more than a thousand investors of the pyramid called Affiliate Program Control-Finance.
Thus, from May to October 2017, against the background of the growing popularity of Bitcoin, Reynolds urged clients to buy and transfer cryptocurrency in Control-Finance, promising investors up to 45% of the yield per month.
He claimed that the company employs experienced cryptocurrency traders who use risk diversification techniques to protect investors' deposits.
However, according to the CFTC, the company did not conduct transactions on behalf of clients, but simply misappropriated their deposits in bitcoins.
The fraudulent scheme was based on the creation of unique one-time crypto wallet addresses to receive customer deposits in the PTS, which were then redirected to other addresses of the wallets in the digital currency payment systems and exchanges in North America, Europe and Asia.
The regulator is convinced that such confusing operations were performed exclusively to conceal misappropriation of funds.
In case investors wanted to withdraw their assets from the account, Reynolds redirected the funds of other clients to make payments. At the same time, he provided investors with false earnings, as well as account balances.
Now CFTC intends to order Control-Finance to return the invested funds to customers, to pay illegally received revenues, as well as a fine.
Recall that in March CFTC fined broker 1pool Ltd and its founder $ 990 thousand.
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