It seems that every other week, there is a story about some sort of Ponzi scheme that has been uncovered which features the use of cryptocurrency to dupe investors. This is likely due to the fact that cryptocurrency is an emerging industry and many are ignorant of the workings of it. While Ponzi schemes have been in existence for decades, cryptocurrency has given scammers a new avenue to exploit and this has kept law-enforcement on their toes with prosecuting and investigating various crypto-related Ponzi schemes. These are not restricted to any part of the world as they have been observed from Africa to Asia to North America.
The Commodity Futures Trading Commission (CFTC) will be pressing charges against a Colorado native and his associated company for defrauding investors in what is being described as a massive Ponzi scheme.
Ponzi and Crypto
The man in question is named Breonna Clark and the company he is associated with is called
Venture capital investments Limited and they are being charged not only with defrauding their investors but also not achieving the necessary registrations with the government.
Venture capital investments Limited had claimed to be running a forex and cryptocurrency trading pool and had targeted US investors for their scam. They had provided fake documents to show credentials and had lured 72 people who invested a total of $534,829 into the business. Fake documents were also provided to show false gains and progress of the business.
In reality, however, Clark and the company were not investing any money but spent roughly $418,000 of the invested funds on non-related items such as luxury cars and then gave some back to initial investors in order to run the Ponzi scheme.
“In its litigation against the defendants, the CFTC seeks restitution to defrauded customers, disgorgement of ill-gotten gains, civil monetary penalties, permanent registration and trading bans, and a permanent injunction against future violations of the Commodity Exchange Act, as charged,” the CTFC says.
This is one of many scams that have been tackled by law-enforcement in recent times and speaks to a growing issue within the crypto industry.