The US commodity futures trading Commission (CFTC) filed a complaint in the Southern district court of New York against Benjamin Reynolds for his involvement in the Bitcoin Ponzi scheme.
All that glitters is not gold.
According to the proposed decision submitted to the CFTC, Benjamin Reynolds will have to pay a total of $ 572 million in fines and restitution fees. Of this amount, $ 429 million will be used to pay the fine, and $ 143 million will be used for compensation. Reynolds did not respond to the CFTC’s complaint, which was originally filed in the new York district court in June 2019.
In June 2019, the CFTC filed an initial complaint seeking answers regarding the Control-Finance Ponzi scheme. However, the owner of the fraudulent cryptocurrency company, Benjamin Reynolds, did not appear in court, and did not respond to investigative questions raised by US Federal agencies.
In its complaint, the CFTC stated that Reynolds launched a fraudulent scheme known as the“ Control-Finance Partner program “ on may 1, 2017, and consequently defrauded more than 1,000 customers with the pyramid scheme, earning at least 22,858 BTC, which is at least $ 147 million at the time. Currently, the laundered funds amount to more than $ 270 million.
Managers of an alleged Bitcoin trading company used the Control-Finance website to advertise a cryptocurrency pyramid scheme. Marketing of crypto fraud was conducted through popular social media platforms such as Facebook, YouTube, Twitter, and others to attract Bitcoin users and investors. The scheme was developed through the partner program.
Ponzi scheme attracts huge bitcoin funds.
Control-Finance accepted funds in Bitcoins from clients, and guaranteed a return of up to 45% per month. However, the collected Bitcoin funds were distributed throughout the company among those responsible for asset management services, thus profiting from the crypto assets under the Ponzi scheme.
Despite the fact that Reynolds promised its users a return of up to 45% per month for their investments, this promise was never fulfilled. Rather, the company ended up misappropriating customer deposits in BTC, and did not conduct any Bitcoin transactions on behalf of investors. According to CFCT’s report, clients have never received any trading profit from their investment in PTS during their entire time participating in the scheme.
Reynolds and his team managed to launder about $ 150 million of misappropriated Bitcoin assets through thousands of blockchain transactions. Scammers associated with crypto investments suddenly stopped their activities in September 2017, removing the Control-Finance website from the Internet, closing all accounts and payments to customers, and removing advertising content from the company’s social media channels.
In addition to restitution and a fine, Reynolds also faces a number of other penalties. It will also be permanently banned from trading crypto assets, and any transactions related to commodity interests will be banned.