[ad_1]
The US regulator understands that an investigation is underway in South Korea, but to date not even the prosecution team has been able to locate Benjamin Reynolds.
About six months after the U.S. Commodity Futures Trading Commission (CFTC) took action against the cryptocurrency fraud scheme Control-Finance Limited and its director Benjamin Reynolds, the regulator is pushing for more time to carry out the service on defendants, as he has difficulty locating Reynolds.
On January 3, 2020, the Commission filed a motion in the New York Southern District Court asking the Court to enter an order
-
authorizing the notification of the trial of defendant Benjamin Reynolds by publication in the Daily Telegraph, e
-
extend the deadline by which the Commission must notify Reynolds and Control-Finance by sixty days.
In a memorandum accompanying the motion, the CFTC explains that it diligently attempted to serve Reynolds. Shortly after filing the complaint (around 17 July 2019), the Commission commissioned Legal Language Services, a litigation support company, to arrange assistance on Reynolds and Control-Finance. LLS has engaged an attorney licensed by the Central Authority for England and Wales to personally serve Reynolds and Control-Finance at their respective addresses listed in the Reynolds incorporation application filed with the UK Registry.
On 31 July 2019, a process server operating under the supervision of the lawyer attempted to personally serve Reynolds at 12 Richmond Street, Manchester, England M1 3NB – the address he listed as his “service address” in Control’s constitutional documents. -Finance. Upon arrival in Manchester, the process server discovered that the address did not actually exist or, at best, corresponded to an office building that had long been abandoned and boarded up.
Also in July 2019, a CFTC staff member attempted to email the complaint, notices, electronic case filing rules for the Southern District of New York, and the Court’s individual files to the only e-mail addresses. known emails associated with Reynolds and Control-Finance: [email protected] and [email protected]. The staff member, however, received a bounce message stating that the email could not be delivered due to an “unknown address error”.
The CFTC also learned from South Korean-based investors that the Ulsan District Attorney’s Office in South Korea is investigating the program run by Control-Finance. CFTC staff spoke to a contact from the South Korean Supreme Prosecutor’s Office regarding this investigation in October 2019. Through further communications with the Supreme Prosecutor’s Office, the Commission understands that the South Korea investigation is ongoing, but as of today the prosecution team has failed to locate Reynolds.
The CFTC made other attempts to contact Reynolds, including by phone, but they were unsuccessful.
Consequently, despite the efforts of the CFTC, Reynolds’ whereabouts are currently unknown.
The CFTC complaint states that, at least as of 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.
At least from May 1, 2017 to October 31, 2017, the defendants urged customers to buy their Bitcoins in cash and then deposit their Bitcoins with the defendants. To lure customers into transferring Bitcoin to them, the defendants made a number of false statements – for example, they claimed to have employed experienced virtual currency traders who earned guaranteed daily trading profits on customers’ Bitcoin deposits.
Furthermore, the defendants hijacked portions of new customers’ Bitcoin deposits to other customers in the manner of a “Ponzi” scheme, falsely representing that these misappropriations were in fact profits generated by 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 the Control-Finance “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 in stolen Bitcoin through thousands of tortuous blockchain transactions. The defendants routed most of these transactions through wallet addresses that the defendants opened at CoinPayments in Vancouver, Canada.
In this action, the CFTC requests civil fines and ancillary reliefs, including but not limited to permanent bans on trading and registration, restitution and disgorging.
[ad_2]Source link
