[null, {"document_url": "http://internetdo.com/bitcoin/two-bitcoin-traders-charged-with-fraud.html", "unformatted_src": "http://i2.cdn.turner.com/money/dam/assets/180118180826-ico-thumbnail-1024x576.jpeg", "src": "http://i2.cdn.turner.com/money/dam/assets/180118180826-ico-thumbnail-1024x576.jpeg", "formatted_filename": "ico thumbnail", "alt_text": "What is an ICO?", "rendered_width": 780, "rendered_height": 439}, null]
You are here: Home / Bitcoin / Two bitcoin traders charged with fraud 

“Increased public interest in bitcoin and other virtual currencies has provided new opportunities for bad actors,” James McDonald, enforcement director for the CFTC, said in a statement.

CFTC enforcement director McDonald said that McDonnell and his company “preyed on customers interested in bitcoin and litecoin, promising them the opportunity to get the inside scoop on the next new thing and to benefit from the trading acumen of a supposed expert.” They allegedly promised a 300% return on investment within one week.

The CFTC says that starting in April 2017, Dean allegedly solicited more than $1 million in bitcoin from more than 600 people, promising to use their virtual funds as “an investment vehicle for trading commodity interests.” But the CFTC says he “misappropriated” the funds, using them to pay other customers “in the manner of a Ponzi scheme.”

CNNMoney was unable to contact Dean. A spokeswoman for the CFTC said it doesn’t have attorneys listed for either defendant.

Related: Feds ramp up focus on ICOs

The feds ramped up their interest in cryptocurrencies late last year. The Securities and Exchange Commission warned investors to be on the lookout for “potential scams” involving Initial Coin Offerings, a form of raising funds that sometimes involved cryptocurrencies while avoiding the regulatory scrutiny of other forms of corporate fundraising.

The SEC also created its new Cyber Unit to seek out “pump and dump” schemes involving ICOs and cryptocurrencies. In December the SEC froze the assets against PlexCorps, a company running an ICO for its own cryptocurrency, and filed charges against the Canadians who were allegedly running it. Their lawyer said they would fight the charges.

CNNMoney (New York) First published January 19, 2018: 2:29 PM ET





