$950M Crypto-Linked Forex Scheme Uncovered by CFTC Lawsuit Against Cash FX Group

The Commodity Futures Trading Commission (CFTC) has filed a lawsuit against Cash FX Group and three individuals, alleging that they operated a multilevel marketing Ponzi scheme involving cryptocurrency. The defendants are accused of soliciting and accepting over $950 million for the purported purpose of trading retail foreign currency contracts in a commodity pool.

The CFTC alleges that the defendants falsely claimed that pool funds were handled by expert traders, proprietary algorithms, and artificial intelligence, and promised up to 15% weekly returns. However, it is alleged that Cash FX engaged in minimal forex trading and misappropriated most of the participant funds, using new contributions from participants to pay fictitious trading profits.

The CFTC also alleges that Cash FX provided false accounting statements to participants, who lost at least $406 million. Director of Enforcement David I. Miller stated, “The Division of Enforcement has continued to refocus on its core mission of protecting the public from fraud and manipulation.”