CFTC Crush Fraudulent Crypto-Powered Binary Options Scheme
The United States Commodity Futures Trading Commission (CFTC) has taken action against Circle Society, Corp and its founder, David Gilbert Saffron for defrauding people through a Ponzi scheme disguised as a bitcoin-powered $11 million binary options trading project. The team allegedly misappropriated clients’ funds and lied to investors, according to a press release on October 16, 2019.
End of the Road
As part of its ongoing war against bad actors in the U.S. cryptospace, a top financial watchdog, the Commodity Futures Trading Commission (CFTC) has hammered down another bitcoin-fueled scam scheme.
Per a press release by the CFTC, the agency has filed a civil enforcement lawsuit in the U.S. District Court for the District of Nevada, against Circle Society, Corp and its founder, David Gilbert Saffron, for operating fake $11 million binary options platform that solicited investment from U.S. investors.
Circle Society and its officials allegedly solicited and accepted investments from U.S. investors to the tune of $11 million (bitcoin and U.S. dollar) from December 2017 to October 2019.
The team deceived investors into believing that the funds will be used for the trading of off-exchange binary options on forex and cryptocurrency pairs and guaranteed investors up to 300 percent return on their investment.
However, instead of using the funds to trade binary options and forex as promised, Circle Society and its team members left the cryptos in Saffron’s bitcoin wallet, using it to pay other participants just like a Ponzi scheme.
Specifically, the Nevada-based Circle Society Corporation and its team have been charged with “fraudulent solicitation, misappropriation, and registration violations.”
Now the CFTC through the court has ordered the project organizers to refund defrauded investors, while also seeking civil monetary penalties, permanent registration and trading, bans, as well as a permanent injunction against violations of the Commodity Exchange Act and Commission regulations in future.
Commenting on the matter, Heath Tarbert, CFTC Chairman noted that while cryptocurrencies have huge potential to transform the economy, scam schemes such as the one orchestrated by Circle Society are impeding the growth of the industry and must not be given a chance to operate.
“Digital assets and other 21st century commodities hold great promise for our economy. Fraudulent schemes 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.”