Altcoin News: CFTC Sues Circle Society for $11 Million Crypto Scam

October 17, 2019, by Marko Vidrih on ALTCOIN MAGAZINE

The US Commodity Futures Trading Commission (CFTC) has announced a lawsuit against the Circle Society, which is suspected of cryptocurrency fraud.

The CFTC has announced that it accuses the Circle Society and its owner David Gilbert Saffron with a “fraudulent solicitation, misappropriation, and registration violations relating to an $11 million binary options scheme.”

According to the lawsuit, the defendants illegally appropriated Bitcoins and US dollars for at least $11 million received from investors in the United States to “trade off-exchange binary options on foreign currencies and cryptocurrency pairs, among other things.” CFTC Chairman Heath P. Tarbert said:

“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. America must be a leader in this space, and we will only succeed if these markets have integrity.”

The regulator claims that defendants forced fraudulently at least 14 people to join the pool managed by the Circle Society, a scam created by Saffron, which guaranteed investment returns of up to 300% per annum. Saffron stored participants’ Bitcoins in a personal cryptocurrency wallet and used them to pay new victims according to the classical financial pyramid scheme.

The CFTC will seek financial penalties, damages and confiscation of illegal proceeds, as well as injunctions against the accused to trade and conduct financial transactions.

The US Commodity Futures Trading Commission is not the first time pursuing cryptocurrency scammers. So, in the summer, a Texas court after a CFTC lawsuit ordered the two defendants to pay $360,000 for managing a fraudulent cryptocurrency scheme. In March, the CFTC fined a startup for $990,000 for illegal operations with Bitcoin, and in November last year, the Commission fined a cryptocurrency trader $1.1 million for fraud.

Circle Society is NOT related to the Circle cryptocurrency operator.

Author: Marko Vidrih