CFTC Accuses Fundsz and Others of Cryptocurrency and Precious Metals Fraud

The US Commodity Futures Trading Commission (CFTC) has taken legal action against individuals and an unincorporated entity named Fundsz, alleging fraudulent solicitation of cryptocurrency and precious metals trading. The CFTC’s lawsuit claims that Fundsz enticed participants by promising remarkable returns through a “proprietary algorithm,” leading to accusations of deception. Let’s delve into the details of this development and its implications.

CFTC’s Allegations

The CFTC has initiated legal proceedings against Fundsz and its associated individuals, alleging fraudulent activities related to soliciting participants for cryptocurrency and precious metals trading.

Deceptive Claims and Solicitation

Starting from October 2022, Fundsz purportedly promoted its trading endeavors by asserting the use of a secretive “proprietary algorithm” that generated weekly returns exceeding 3%. Such claims were utilized to solicit participants to invest in their trading activities.

Misrepresentation and Financial Gains

According to the CFTC, participants were enticed to deposit an initial amount of $2,500, with the promise that this investment would grow to $1 million over four years. However, the CFTC asserts that Fundsz did not engage in actual trading using customer funds and provided false reports of weekly returns.

Legal Consequences and Asset Freeze

The accused parties have already faced a unilateral statutory restraining order, which freezes their assets, preserves records, and appoints a temporary receiver. A hearing for the preliminary injunction motion filed by the CFTC is scheduled for August 23rd.

Seeking Restitution

Apart from legal actions, the CFTC aims to secure compensation for defrauded investors, return illicit gains, impose civil penalties, establish permanent trading and registration bans, and obtain permanent injunctions against any further violations of the Commodity Exchange Act.

Conclusion

The CFTC’s legal action against Fundsz and the individuals involved underscores the regulatory authorities’ commitment to safeguarding investors and maintaining the integrity of the cryptocurrency and precious metals markets. As the case unfolds, it serves as a reminder of the importance of due diligence and caution while engaging in any investment activity.