A man from Las Vegas has been charged with raising at least USD 11 million from cryptocurrency investors following promises to trade binary options for and acquire gains of up to 300% billion. As per the charges, the money was sent from new clients to previous ones, a classic Ponzi scheme outfit.
The CFTC has made the announcement that it will be filing a civil enforcement action in the US District Court for the District of Nevada, which seeks to charge David Gilbert Saffron, a Las Vegas local as well as his circle Society Corp. with the charges of fraudulent solicitation, misappropriation and registration violations.
The case is alleged to constitute a USD 11 million binary options scheme Safron conducted through his company. The court gave out an order that aims to freeze the assets controlled by Saffron and his company following the case filing by the CFTC. The chairman of CFTC, Heath P. Tarbert, is quoted to say concerning the case, “digital assets and other 21st century commodities hold great promise for our economy. These schemes not only cheat innocent people out of their hard-earned money but also threaten to undermine the responsible development of this new and innovative market.”
It is estimated that starting December 2017 to current, the Las Vegas man, Saffron, and his company managed to drum up a neat USD 11 million worth of Bitcoin and US dollars solicited from people in the US in a bid to trade of exchange binary options on forex and cryptocurrency pairs.
According to the complaint, the individuals solicited funds from at least 14 investors to participate in a pool conducted by Circle Society, which is Safron’s company and that was allegedly created for the sole purpose by making false allegations about his supposed trading expertise and guaranteeing rates of return of up to 300% for his investors.
The CFTC uncovered that rather than using the funds for trading binary options contracts as initially promised, the assets were misappropriated including by keeping pool participants money in Saffron’ saffron’s personal cryptocurrency wallet and by using the funds to pay other participants which is the classic identity and distinguishing factor of a Ponzi scheme.
The man and his company located in Las Vegas, Nevada, are also accused of lying to pool participants in order to hide the misappropriation of their funds. The court case filed by the CFTC seeks to see through full restitution to defrauded investors rid the Nevada Man of all ill-gotten gains, execute penalties of civil monetary reach and also ban the man from permanent trading among other penalties. However, the CFTC did warn the alleged victims that restitution orders may not result in full recovery of their lost money as the accused may not have sufficient funds or assets left to pay them in full.