$950M Crypto-Linked Forex Scheme Unraveled by CFTC Lawsuit
The Commodity Futures Trading Commission (CFTC) has filed a lawsuit against Cash FX Group and three individuals, alleging a $950 million foreign-exchange investment scheme linked to cryptocurrency.
The defendants, including Cash FX CEO Huascar Jose Lopez Castillo of Brazil, allegedly operated a multilevel marketing Ponzi scheme that solicited and accepted over $950 million for the purpose of trading retail foreign currency contracts in a commodity pool.
The CFTC claims that the defendants falsely promised up to 15% weekly returns and engaged in minimal forex trading, misappropriating most of the participant funds. New contributions from participants were used to pay fictitious trading profits, while millions of dollars were directed to each defendant.
Cash FX allegedly provided false accounting statements to participants, resulting in losses of at least $406 million.