Key facts
- The CFTC alleges Cash FX operated a $950 million Ponzi scheme involving cryptocurrency.
- The scheme purportedly involved trading retail foreign currency contracts in a commodity pool.
- Defendants allegedly promised up to 15% weekly returns.
- Cash FX allegedly engaged in minimal forex trading and misappropriated most participant funds.
- Participants lost at least $406 million, according to the CFTC.
- The CFTC filed the complaint on Friday in the US District Court for the Middle District of Florida.
The Commodity Futures Trading Commission (CFTC) has filed a lawsuit against Cash FX Group and three individuals, accusing them of operating a $950 million foreign-exchange investment scheme that involved cryptocurrency and functioned as a multilevel marketing Ponzi scheme. The complaint, filed Friday in the US District Court for the Middle District of Florida, alleges that the defendants solicited and accepted over $950 million from participants for the purported purpose of trading retail foreign currency contracts in a commodity pool.
The CFTC claims that the defendants falsely represented that pool funds were managed by expert traders, proprietary algorithms, and artificial intelligence, while promising participants returns of up to 15% weekly. According to the agency, Cash FX engaged in minimal foreign-exchange trading and instead misappropriated the majority of participant funds. New contributions were allegedly used to pay fictitious trading profits, with millions of dollars directed to each of the defendants. Participants are said to have lost at least $406 million, and Cash FX also provided false accounting statements.
David I. Miller, Director of Enforcement for the CFTC, stated that the Division of Enforcement remains focused on protecting the public from fraud and manipulation, highlighting the action against the massive fraud as a reflection of the agency's commitment.