In a scenario where cryptocurrencies are gaining more and more prominence in the global financial market, it is inevitable that authorities keep an eye on operations related to them. Recently, the US Commodity Futures Trading Commission (CFTC) put Mosaic Exchange Limited and its CEO, Sean Michael, in the spotlight.
The reason? The CFTC filed a civil lawsuit against the US-based company and its chief executive in the US District Court, located in the Southern District of Florida. According to the indictment, both were involved in a fraudulent scheme related to digital asset commodities.
The defendants allegedly defrauded a total of at least 17 investors, both in the US and abroad. Investors were persuaded to shell out hundreds of thousands of dollars in Bitcoin and other digital assets with the promise that these funds would be used for trades on behalf of clients. However, instead of fulfilling what was promised, the funds were allegedly misappropriated.
The crux of the matter lies in the period between February 2019 to June 2021. In between, Mosaic Exchange was painted by defendants as a robust cryptocurrency trading platform, boasting tens of millions of dollars in assets under management. The icing on the cake was the offer of a supposed revolutionary trading algorithm with an impressive 82% accuracy. To attract more investors, they promised monthly profit margins that ranged between 20% and 60%. However, according to the CFTC, these claims were unfounded and completely false.
In response to the alleged fraudulent scheme, the CFTC is now seeking restitution, damages and civil penalties. The agency is also demanding permanent trading and registration bans, along with a permanent court order to prevent future violations of guidelines established by the CFTC and the Commodity Exchange Act (CEA).
The views and opinions expressed by the author, or anyone mentioned in this article, are for informational purposes only and do not constitute financial, investment or other advice. Investing or trading cryptocurrencies carries a risk of financial loss.