CFTC wins Fundsz crypto and precious metals fraud case, two defendants ordered to pay over $30 million in penalties

BlockBeats news, October 1: The U.S. Commodity Futures Trading Commission (CFTC) stated that the U.S. District Court for the Middle District of Florida issued a default judgment on Wednesday against Brian Early and Alisha Ann Kingrey, defendants in the Fundsz fraud case, ordering them to pay more than $30 million in penalties.

The court found that the two, as board members and administrators of the Fundsz entity's Telegram group, made material misrepresentations regarding expected returns, historical trading performance, and risk of loss, and falsely claimed that investor funds could be traded through a "proprietary algorithm" and withdrawn with principal and interest. After learning of the CFTC investigation, the two attempted to retract profit claims and erase Fundsz's social media traces. On the same day, the court issued consent orders against two other defendants, Rene Larralde and Juan Pablo Valcarce.

Larralde died in 2023, and Rachel Larralde was substituted as a defendant and ordered to surrender possession and control of Larralde's residence "as is." Valcarce was permanently prohibited from having others trade cryptocurrencies or precious metals on his behalf and from further violating CFTC-related regulations.