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The proposed default judgment against Benjamin Reynolds also provides for the return of nearly $ 143 million.
In line with previous FinanceFeeds reports, the U.S. Commodity Futures Trading Commission (CFTC) filed a proposed default judgment against Benjamin Reynolds, sole director and owner of the Control-Finance cryptocurrency fraudulent system.
The document, filed with the Southern District Court of New York on August 20, 2020, the CFTC explains that Reynolds did not appear or respond to the CFTC’s complaint.
Under the proposed default judgment, Reynolds will have to pay restitution in the amount of $ 142,986,589. In addition, he will have to pay a civil fine in the amount of $ 429,000,000.
The proposed ruling also includes a permanent injunction. Reynolds will be permanently detained, enjoined and prohibited, inter alia, from trading in or subject to the rules of any registered entity, engaging in transactions involving “commodity interest” and / or the virtual currency Bitcoin.
According to the CFTC complaint, since at least May 1, 2017, through the present, Control-Finance Limited and Reynolds have harnessed public enthusiasm for Bitcoin by operating a fraudulent scheme to embezzle at least 22,858,822 Bitcoin, which achieved a rating of over $ 147 million, from more than 1,000 customers.
The defendants hijacked portions of the new customers’ Bitcoin deposits to other customers in the manner of a “Ponzi” scheme, falsely representing that these embezzlement were actually profits generated by the virtual currency trading.
The defendants used the Control-Finance website, as well as social media websites including Facebook, YouTube and Twitter, to build an elaborate pyramid scheme which they called Control-Finance’s “Affiliate Program.”
On or about September 10, 2017, the defendants abruptly terminated operations by removing the Control-Finance website from the Internet, stopping payments to customers and affiliate program members, and deleting advertising content from the defendants’ Facebook, YouTube and Twitter accounts. .
Defendants, however, continued to argue, via email and Facebook, that they would make all customers whole by returning their Bitcoin deposits, minus any previous payments, by the end of October or November 2017.
In fact, the defendants laundered nearly $ 150 million worth of stolen Bitcoin through thousands of torturous blockchain transactions. The defendants routed most of these transactions through wallet addresses that the defendants opened at CoinPayments in Vancouver, Canada.
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