Four people and their company, Fundsz, have been charged by the Commodity Futures Trading Commission (CFTC) with conducting a fraudulent operation involving trading in cryptocurrencies and precious metals. For their participation in deceptive investment solicitations, Rene Larralde of Melbourne, Florida, Juan Pablo Valcarce of West Melbourne, Florida, Brian Early of New Orleans, Louisiana, and Alisha Ann Kingrey of Franklin, Arkansas, along with their unincorporated organization Fundsz, are being looked into.
The defendants are charged with defrauding investors in the Middle District of Florida U.S. District Court by promising unrealistic profits based on a fictitious “proprietary algorithm,” according to the CFTC’s complaint.
The CFTC’s Ian McGinley reaffirmed the organization’s commitment to fighting fraud in the cryptocurrency and precious metals markets.
According to the CFTC, Fundsz lured investors with the promise of steady weekly earnings of 3% from trading in cryptocurrencies and precious metals. The defendants promoted Fundsz as a very lucrative business, claiming that a $2,500 investment could increase to $1 million in only 48 months.
Additionally, they misrepresented Fundsz’s affiliation with charity groups in order to capitalize on the attractiveness of supporting honorable causes.
The regulatory body claims that the defendants lured over 14,000 people with false weekly returns, while Fundsz allegedly withheld trading client cash and gave consumers false weekly returns.
This month, U.S. District Court Judge Wendy Berger issued a statutory restraining order that essentially frozen the defendants’ assets and appointed a temporary receiver. The date of the preliminary injunction hearing is August 23.
In its continuing legal action, the CFTC is seeking a number of different types of redress, including compensation for investors who were duped, the forfeiture of illicit proceeds, civil monetary penalties, lasting trading and registration bans, and a permanent injunction against further Commodity Exchange Act (CEA) breaches.
CFTC and SEC Step Up Inspection of the Crypto Industry
The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), two significant U.S. financial authorities, have increased their investigation of Fundsz. This increased monitoring comes in response to the significant failure of the cryptocurrency exchange FTX.
The CFTC filed a complaint against Binance and its founder Changpeng “CZ” Zhao earlier this year, saying that the exchange purposefully offered unregistered crypto derivative products in the United States in violation of the law.
The SEC also filed a lawsuit in June against Binance and its CEO for what it said was their “blatant disregard of the federal securities laws,” naming 13 counts against them, including running an unregistered exchange, as part of this case.
Throughout this year, the SEC has also taken enforcement proceedings against the cryptocurrency exchanges Kraken and Bittrex as well as the crypto lending site Nexo.