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A federal court has ruled against a cryptocurrency Ponzi scheme and its founder in a lawsuit filed by the Commodity Futures Trading Commission (CFTC). The scheme, known as Venture Capital Investments LLC (VCI), will have to pay $ 900,000 in restitution and penalties.
The CFTC announced in a press release that the Colorado District Court had issued a ruling against VCI and its founder, Breonna Clark. In its ruling, the court found Clark guilty of “fraudulent solicitation and misappropriation of funds from clients in a digital asset and forex Ponzi scheme.”
Clark, who also went to Alexander Pak to his clients, will have to pay $ 450,302 in refund to the clients he has defrauded. The court also ordered her to pay 450,302 as a civil fine. You will also have to cover all costs incurred by the CFTC in the course of the process.
“In addition, defendants are now permanently enjoined to engage in conduct that violates the Commodity Exchange Act (CEA) and CFTC regulations, as well as prohibited from registering with the CFTC and trading on any CFTC regulated market.”
As reported by CoinGeek, the CFTC filed a lawsuit against Clark in February, claiming the Colorado resident attracted 72 people to invest $ 534,829 in his company. Claimed to offer digital currency and forex investment services. However, he only used the money for personal expenses, including buying a BMW. He also used some of the money to make payments to his investors in a Ponzi-style deal.
The CFTC also accused Clark of misleading potential clients about his investment expertise, experience and track record, and of using them to promise profitability to clients. Whenever clients requested bank statements to track their investments, it sent them false statements showing profitability. Additionally, Clark was unable to register VCI with the CFTC under applicable regulations.
The CFTC has strengthened its hold on the digital currency industry in the United States by cracking down on scams and enacting regulations to guide market participants. In October 2020, it issued a new notice to futures commission traders on holding digital assets in separate accounts.
See also: CoinGeek Live panel on the regulation of digital assets and digital asset activities
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