$11 Million Pyramid Scheme Attacked By Lawsuit From the CFTC

Just announced this week from The United States Commodity Futures Trading Commission (CFTC) is the filing of a civil enforcement action against Circle Society.

The owner of the Nevada-based firm, David Gilbert Saffron is being charged by the CFTC under claims of “fraudulent solicitation, misappropriation, and registration violations relating to an $11 million binary options scheme.”

The charges claim that the defendants misappropriated around $11 million worth of the leading cryptocurrency and US dollars from different people in the States in order to “trade off-exchange binary options on foreign currencies and cryptocurrency pairs, among other things.” The Chairman of the CFTC, Heath P. Tarbert said:

“Fraudulent schemes, like that alleged in this case, not only cheat innocent people out of their hard-earned money, but they threaten to undermine the responsible development of these new and innovative markets. America must be a leader in this space, and we will only succeed if these markets have integrity.”

The defendants are said to have fooled around 14 people into joining a pool operated by Circle Society, a fraudulent body that Saffron designed that guaranteed up to 300 per cent returns. The owner is supposed to have retained the participants’ funds in his own personal crypto-wallet which he used to pay new investors. Essentially this was done in the way of a Ponzi scheme, however, how much of this is true is unknown. 

As reported by CoinTelegraph:

“The CFTC will seek civil monetary penalties, restitution, rescission, disgorgement of ill-gotten gains, and trading and registration bans, but is aware that there might not be sufficient funds or assets to cover all the losses.”

Commodities

Reports recently surfaced stating that the new CFTC chairman believes Ethereum is a commodity and that trading the token is becoming very much real. 

Tarbert said:

“We've been very clear on bitcoin: bitcoin is a commodity. We haven't said anything about ether—until now [...] It is my view as chairman of the CFTC that ether is a commodity.”

It will be interesting to see how this situation plays out. For more news on this and other crypto updates, keep it with CryptoDaily!