Malicious actors and activities in the crypto space are not going anywhere in the distant future, and so are regulators and law enforcement. Despite so many laws and regulations prohibiting all these acts, some people still risk jail terms to carry out these acts.
In a new case coming out of New York, a federal judge has ordered a Bitcoin trader arrested for carrying out tons of Ponzi schemes to return funds close to $600 million for his activities. In the case opened in the early part of this month, Judge Mary Kay Vyskocil has ordered the offender to pay about $429 million and $143 million in fines and penalties in the space, respectively.
The scammer was said to have scammed more than 1,000 people
Before the ruling was made, the Judge pointed to the very impressive investigations that the United States Commodities Futures Trading Commission carried out. In the investigations carried out, the Judge pointed out that the accused, Benjamin Reynolds, was guilty of fraud-related charges. However, the default ruling was announced today after Reynolds failed to address a complaint that the US CFTC made.
The judgment was published in the Westlaw journal. In the charge sheet, the complaint noted that the criminal in question, Reynolds, had coerced more than 1,000 investors to deposit a total of 22,858 Bitcoin on his platform. He pointed out that even though 169 of them were US residents, Reynolds carried out his operations unfazed between May 2017 to October 2017.
When the deposits were made, the total tokens on the platform were said to be worth about $143 million that he was asked to pay for restitution. Presently, the digital assets are worth a region close to $1.5 billion.
The CFTC has been granted the right to go after Reynolds
Control Finance was said to have used the ignorance of customers who believed that they would trade digital assets on their behalf. The customers were also told that there would be given some special rewards based on the number of clients they bring into the platform. The CFTC highlighted that Control Finance failed to carry out all the activities that they highlighted.
They refused to trade on behalf of the customers and failed to pay them due for referrals. It also said that the firm diverter the gains for themselves. After collecting the Bitcoin from the users, the firm owner was said to have shit down operations and tried to use masked blockchains to withdraw the funds.
Reynolds has not yet contacted the authorities since 2019, when he was asked to summon. They also said they placed several ads in newspapers across the country. With Reynolds failing to appear, the CFTC can now go after everything he holds in the country and the United States.
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