I was truly atrophied when I first heard about the following news. It not only made me feel sad for the victims but also make me think twice and try as much as I can to be on the safe side.
It was about Benjamin Reynolds who was a manager at Control-Finance Limited.
He was found to have committed cryptocurrency fraud in a US case and fined $ 572 million.
Summary
The US Commodity Futures Trading Commission (CFTC) announced the decision of the lawsuit regarding bitcoin fraud filed in 2019.
According to the court decision, 22 thousand bitcoins were collected from over a thousand victims worldwide and Reynolds was fined a total of $ 572 million.
CFTC announced that Briton Benjamin Reynolds, a manager at Control-Finance Limited (Control-Finance) which is an alleged Bitcoin trading and investment company, was found to have committed cryptocurrency fraud.
The lawsuit filed in 2019 was heard in New York's Southern District Court on the grounds that Reynolds and the company engaged in ''ponzi scheme'' - like a fraud for ''fraudulently obtaining and abusing Bitcoin to use public enthusiasm with Bitcoin''.
What is Ponzi Scheme?
The Ponzi Scheme is a form of fraud that pays previous investors with funds from new investors. It leaads victims to believe that their profits come from product sales or other means, and the other investors are not aware that it is a source of funds.
$ 143 Million Bitcoin Fraud in 2017
A statement from the CTFC's official site said the court ordered Reynolds to return $ 143 million to the victims.
As a result of the ruling on March 2, Reynolds was reported to have victimized more than a thousand people worldwide via his public website, social media accounts and emails between the months May 2017 and October 2017.
Meanwhile, Benjamin Reynolds is said to have asked for 22,190 Bitcoins worth a total of $ 143 million from the victims.
Reynolds was permanently barred from registering with the CFTC and trading in any market regulated by the CTFC due to his conduct in violation of the Commodity Exchange Act (CEA) and CFTC regulations.
CFTC warns: Victims may not get their money back
According to a CFTC statement, Reynolds testified to the clients that Control-Finance buys and sells its own Bitcoin deposits on virtual currency markets and employs private virtual currency traders who provide guaranteed trading profits for all customers.
In addition, Reynolds reportedly set up an elaborate affiliate marketing network based on the promise of fraud in paying excessively large referral profits, rewards and bonuses to encourage new customers to direct them to Control-Finance.
Reynolds who did not make any trades on behalf of clients was stated that he did not make any profit on behalf of clients and he did not award prizes, either.
Reynolds said he would return Bitcoin deposits to Control-Finance customers by the end of October 2017, but he was reported that he never paid. Instead he kept the deposits for his own personal use.
Customers reportedly lost most or all of their bitcoins at the end of the plan.
The CFTC stated the following:
''The CFTC warns victims that compensation orders will not result in the recovery of lost money, because offenders may not have sufficient funds or assets. The CFTC will continue to fight vigorously to protect customers and ensure offenders are held accountable.''
However, the so-called company's account opened on LindedIn still promises profits.
The whereabout of Reynolds who did not attend the earlier hearings is unfortunately unknown!
I think, because of the growing popularity of cryptocurrencies and people's interest on them must be taking such fraudsters' attentions more than ever.
So, everybody should be careful about that and trust only legal, well-known and trusted companies to make their transactions or trades.