Sues Archives -
Dominic Monaghan had some landscaping done at his place by a guy he thought was qualified to do the job — but turned out to be far from it … this according to a new lawsuit. The “Lord of the Rings” and “Lost” star just filed suit against Bruce De…
The U.S. Commodity Futures Trading Commission has filed charges against three separate companies for engaging in fraudulent schemes involving cryptocurrencies. The cases include fraud and misappropriation of bitcoin and litecoin.
CFTC Sues Crypto Operators
The U.S. Commodity Futures Trading Commission (CFTC) filed civil enforcement actions in a New York District Court on Thursday against three separate cryptocurrency operators for allegedly defrauding customers and breaking commodity trading rules. The agency proceeded to post details of two of the cases on its website on Friday.
The first case concerns Colorado resident Dillon Michael Dean and his UK-registered company, the Entrepreneurs Headquarters Ltd. They solicited $ 1.1 million worth of bitcoin from over 600 members of the public from April 2017 to the present, promising to convert them into fiat currency and invest in a pooled investment vehicle such as binary options. Dean claims to have “strong skills” in options trading and customers were promised high rates of return, the CFTC detailed.
However, the derivatives watchdog alleges that the defendants did not trade on behalf of their customers but misappropriated over $ 1 million in customers’ funds. Dean also launched another similar trading venture called Real Trade Profits.
Citing that the defendants failed to register with the Commission as a Commodity Pool Operator (CPO) and Associated Person of a CPO, the agency stated:
The CFTC Complaint charges the defendants with engaging in a fraudulent scheme to solicit bitcoin from members of the public, misrepresenting that customers’ funds would be pooled and invested in products including binary options, making Ponzi-style payments to commodity pool participants from other participants’ funds, [and] misappropriating pool participants’ funds.
Bitcoin and Litecoin Related Fraud
The second case concerns Patrick K. Mcdonnell and his company Cabbage Tech. Corp., doing business as Coin Drop Markets (CDM).
The CFTC is “charging them with fraud and misappropriation in connection with purchases and trading of bitcoin and litecoin.” Citing that neither Mcdonnell nor his company has ever been registered with the agency in any capacity, the regulator added:
The CFTC Complaint alleges that from approximately January 2017 to the present, Mcdonnell and CDM engaged in a deceptive and fraudulent virtual currency scheme to induce customers to send money and virtual currencies to CDM, purportedly in exchange for real-time virtual currency trading advice and for virtual currency purchasing and trading on behalf of the customers under Mcdonnell’s direction.
The Commission found that “the supposedly expert, real-time virtual currency advice was never provided,” adding that customers never saw the funds they sent to Mcdonnell or CDM again. Furthermore, the agency stated that the defendants “removed the website and social media materials from the Internet and ceased communicating with CDM Customers, who lost most if not all of their invested funds due to [the] defendants’ fraud and misappropriation.”
The third case, however, “remained under seal,” Reuters described. At the time of this writing, the CFTC has not released the details of the third case.
What do you think of the CFTC suing these companies for crypto-related fraud? Let us know in the comments section below.
Images courtesy of Shutterstock.
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The post US Regulator Sues Three Companies For Cryptocurrency Fraud appeared first on Bitcoin News.
A former Wells Fargo mortgage banker in Beverly Hills who was fired and later fined by federal regulators has sued the bank, saying he was used as a scapegoat and that regulators ignored his attempts to report bad practices.
David Eghbali, who had been one of the bank’s top mortgage bankers, said…
A bitcoin investor sued the Huobi exchange to recover 400,000 yuan he lost while trading.
Too Much Pressure Trading Bitcoin
Wang Tieliang filed a lawsuit against Huobi and its two partners in Beijing to invalidate his bitcoin trades on the exchange. According to Wang, he deposited 1.4 million yuan at Huobi to speculate on bitcoin in October of 2016. But within a few months, he couldn’t handle the pressure to see himself losing money, and cashed out once and for all.
The plaintiff told the court that his trades at Huobi should be invalidated because bitcoin doesn’t exist:
Bitcoin does not exist and is not a legal tender. Marxism says that a commodity should have price and value and clearly bitcoin can not be classed as a commodity. Besides, bitcoin is not a real currency for it is not issued by the central bank. Therefore, it shall not be used to trade or as a payment method.
Huobi argued that Wang doesn’t understand what bitcoin is. And it’s not Huobi that traded with him, it’s other users at the platform. Huobi only serves as a third-party platform that has been operating lawfully. Huobi added that the price of bitcoin is decided by the market, not by the platform.
Another two Beijing-based companies pleaded that they only help Huobi receive users’ deposits. As such, they have nothing to do with Wang’s losses.
The Court Judgement
The People’s Court of Haidian District, Beijing dismissed the lawsuit, saying investors should be responsible for their own losses. The court judgement explained:
When users trade bitcoin they are supposed to fully understand relative risks concerning it. They should invest only the amount they can afford to lose and undertake all responsibilities.
The court judge noted that bitcoin is not a commodity. It has no use value. The PBOC has no right to define bitcoin as a virtual commodity. And Huobi has no right to trade bitcoin. It can only offer trade services.
What do you think of the lawsuit? Do you agree with the judge? Leave your thoughts below.
Images via Shutterstock, China Judgement Online.
Need to calculate your bitcoin holdings? Check our tools section.
The post Bitcoin Investor Sues Huobi Over ¥400,000 in Losses appeared first on Bitcoin News.
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