CFTC Sues Alleged Crypto Ponzi Scammer for $500K Theft

According to a press release, Breonna Clark, otherwise known as Eliot Clark or Alexander Pak, and his firm Venture Capital Investments Ltd. and The Life Group allegedly raised $534,829 from 72 victims, promising to invest funds in bitcoin (BTC), altcoins and foreign currency contracts. Instead, some $400,000 in funds went to personal uses, including the purchase of a BMW.

The U.S. Commodity Futures Trading Commission (CFTC) is suing an alleged Ponzi scammer on claims he and his company raised half a million dollars for cryptocurrency investments, which instead went to personal uses.

The CFTC is charging Clark with fraud by a commodity pool operator and commodity trading adviser, fraud by deceptive device, failure to register as a commodity pool operator and failure to register as a commodity trading advisor.

Clark created “false account statements” to mislead investors and used some of the funds he raised to pay off other investors, an attached complaint claims. “A small portion” of the funds were ultimately used to trade on the pool’s behalf.

“At various times during the Relevant Period, several pool participants requested to withdraw funds from their accounts. In some instances, Clark failed to respond at all to a pool participant’s request. In other instances, Clark responded with false excuses. Among the false excuses Clark made to pool participants why Defendants could not comply was that the CFTC was conducting an ‘audit,'” the complaint said (the CFTC did not conduct an audit).

Clark did not return any of the funds raised through the alleged scheme, the complaint said.

The press release thanked the Financial Supervision Commission of Bulgaria, Financial Markets Authority of New Zealand, Seychelles Financial Services Authority, St. Vincent and the Grenadines Financial Services Authority and the U.K. Financial Conduct Authority.

CFTC Takes Action Against Crypto Options ‘Ponzi Scheme’

A purported cryptocurrency and foreign exchange investment firm is in hot water with the U.S. Commodity Futures Trading Commission (CFTC) and stands accused of operating like a Ponzi scheme.

In a press release on Wednesday, relating to a complaint filed Sept. 30., the CFTC said it’s charging Nevada-based Circle Society and its operator David Gilbert Saffron with fraudulently soliciting and misappropriating investor funds, as well as registration violations.

Through his firm, Saffron offered binary options on forex and cryptocurrency pairs and is alleged to have fleeced investors for $11 million in dollars and bitcoin since 2017.

The complaint says Saffron fraudulently solicited funds from at least 14 individuals to participate in an investment pool operated by Circle Society, making false claims about his trading expertise and “guaranteeing” gains of up to 300 percent.

Instead of using participants’ investments to actually trade in binary options contracts, Saffron used the funds – diverted to his own crypto wallet – to pay other participants, “in the manner of a Ponzi scheme.” The misappropriation of the funds was concealed with a tissue of lies, allegedly.

CFTC Chairman Heath Tarbert said:

“Digital assets and other 21st century commodities hold great promise for our economy. 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.”

A court has ordered the freezing of any assets held by Saffron and Circle Society, as well as the preservation of financial records. A hearing over the case will take place Oct. 29.

The CFTC is seeking to retrieve the funds contributed to the scheme, alongside penalties and permanent registration and trading bans. The agency hopes to return invested funds to victims, though it said it cannot guarantee the full value can be obtained from Saffron and his firm.

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