The US Commodities Futures Trading Commission (CFTC) has won a court order to permanently block the operator of CabbageTech Corp. of New York for "daring and vicious fraud related to cryptocurrency", Bloomberg reported on August 24  At the start of this year, Patrick McDonnell, cryptocurrency promoter and operator of CabbageTech Corp., was charged with "fraud and embezzlement in relation to purchases and trade of Bitcoin (BTC) and Litecoin (LTC). " McDonnell later claimed that the CFTC did not have the authority to regulate its commercial operations; however, New York District Judge Jack B. Weinstein rejected his request.
In July, Weinstein conducted a trial without oath, stating that McDonnell ran a "boiler room", misleading investors in various states and counties using "tricks", false statements and misappropriation of funds, "notes Bloomberg Weinstein made a judgment that McDonnell had to pay $ 290,429 in restitution and $ 871,287 in penalties.
According to Bloomberg, CabbageTech was not represented by a lawyer, since McDonnell claimed he could not afford to pay for a lawyer. He ceased to appear in court during the trial
McDonnell was also involved in a case other than the CFTC against his other company, Coin Drop Markets The CFTC claimed in the lawsuit that customers who paid McDonnell and Coin Drop for advice encryption did not receive the advice they paid, and that McDonnell closed the Coin Drop website and did not respond to clients. The lawsuit also notes that Coin Drop was not registered with the CFTC.
Last month, speaking from Capitol Hill, Congressman Bill Huizenga said Congress should authorize financial regulators such as the Securities and Exchange Commission (SEC) and the CFTC to regulate the cryptocurrency market in accordance with the same rules that regulate other currencies and stocks.
In May, the CFTC president, Chris Giancarlo, said he did not see a complete encrypted legislation coming from the federal level in the near future, pointing out that the statutes with which the CFTC operates were written in 1935. He added that it will take some time to adopt a modern innovation like Bitcoin within terms invented decades ago