US Regulator Accuses Head of Defunct British Bitcoin Firm of $147 Million Fraud


A US commodities regulator has filed a lawsuit accusing a defunct British cryptocurrency firm and its former principal of fraudulently misappropriating at the least 22,858,322 Bitcoin price $147 million (roughly Rs. 1,000 crores) from greater than 1,000 clients.

In a grievance filed on Monday, the US Commodity Futures Buying and selling Fee stated Management-Finance and Benjamin Reynolds “exploited public enthusiasm” for Bitcoin by falsely representing that their “professional” merchants may generate earnings of 1.5 p.c a day, or 45 p.c a month, from it.

The CFTC stated the defendants in actuality did no buying and selling and made no earnings for purchasers, at the same time as they promised rewards within the type of Bitcoin for referring new clients.

Management-Finance and Reynolds had been additionally accused of making “sham” buyer account balances and revenue statements, and making “Ponzi scheme-like funds” to clients requesting withdrawals to hide the fraud and feign profitability.

It was unclear on Tuesday whether or not Reynolds has a lawyer, and Reynolds couldn’t instantly be reached for remark.

The lawsuit, filed within the US district court docket in Manhattan, seeks civil fines, restitution, an injunction towards additional violations of US commodity legal guidelines, and different treatments.

Losses from cryptocurrency theft or misappropriation totalled about $1.21 billion within the first quarter of 2019, or about 70 p.c of the overall for all of 2018, the cyber-security agency CipherTrace stated in April.

Management-Finance was dissolved by a British regulator in February 2018, the grievance stated.

The case is Commodity Futures Buying and selling Fee v Management-Finance, US District Courtroom, Southern District of New York, No. 18-05631.

© Thomson Reuters 2019

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