The Commodity Futures Trading Commission (CFTC) has charged three individuals for a cryptocurrency-related scam. The three operated a business known as Global Trading Club, which they used to trade cryptocurrencies on behalf of their clients.
The consent order entered by the CFTC was against the three individuals known as Cesar Castaneda, Joel Castaneda Garcia and Mayco Alexis Maldonado Garcia. The order imposes the three with a permanent injunction, and it permanently banned them from trading commodities and registering with the CFTC.
Hefty Fines
The order against the three also came with heavy fines of $989,550 in restitution charges. Maldonado was required to pay a civil monetary penalty of $400,000, while Castaneda and Garcia were required to pay $180,000 each.
The CFTC filed a case against the three individuals in the Southern District of Texas on September 14, 2021. Besides the three, a separate litigation case of a fourth individual, Rodrigo Jose Castro Molina, was also filed.
The investigators responsible for the case include Aimee Latimer-Zayets, Erica Bodin, James A. Garcia, Maura Viehmeyer and Rick Glaser.
Details of the Case
Details of the consent order show that from August 2016 to October 2017, the three defendants and other individuals working in the company made a false representation of their business, claiming that it employed highly qualified traders with extensive experience in cryptocurrencies and who used effective bots to trade Bitcoin for clients round the clock.
The defendants also lied to clients that their earnings would increase depending on the amount deposited. The defendants also urged existing clients to refer others and earn bonuses. To hide their fraudulence, the defendants also posted false trading statements on online platforms. When the company was in operation, 27 clients made deposits totalling $989,000 with representatives of the firm.
The CFTC has been strict in ensuring compliance with crypto regulations. In a separate case last month, the financial regulator filed a civil enforcement lawsuit against other individuals involved in a multimillion commodities investment scheme.
The charges were filed at the US District Court for the Southern District of New York against Kathleen Hook, Ross Baldwin, Robert Jeffrey Johnson and other affiliated companies.
In addition, the CFTC has also received a green light from a federal court to collect a $100 million fine from BitMEX cryptocurrency derivatives trading platform for illegal operations and for failure to comply with anti-money laundering regulations.
