CFTC sues Cash FX and three individuals over $950 million crypto-related Ponzi scheme

BlockBeats news, September 26: The U.S. Commodity Futures Trading Commission (CFTC) announced that it has filed a lawsuit against Cash FX Group and three individuals, accusing them of operating an investment scam involving more than $950 million and involving cryptocurrency. The defendants include Cash FX and its CEO Huascar Jose Lopez Castillo (Brazil), The Conversion Pros and its CEO Ronald Pope (Oregon), and Justin Halladay (Florida). The complaint was filed on Friday in the U.S. District Court for the Middle District of Florida. The CFTC alleges that the defendants operated a multi-level marketing Ponzi scheme, soliciting and accepting more than $950 million under the guise of trading retail forex contracts in a commodity pool.

The CFTC stated that the defendants falsely claimed the funds were managed by professional traders, proprietary algorithms, and artificial intelligence, and promised returns of up to 15% per week. In reality, however, Cash FX conducted very little forex trading and misappropriated most participants' funds, using payments from new participants to pay fictitious trading profits while transferring millions of dollars to each defendant. The defendants also provided participants with false account statements, and participants lost at least $406 million.