Cash FX Group Accused of $950 Million Forex Ponzi Scheme
The U.S. Commodity Futures Trading Commission (CFTC) has filed a civil enforcement complaint against Cash FX Group S.A., its CEO Huascar Jose Lopez Castillo, and three other defendants for allegedly running a multilevel-marketing Ponzi scheme that took in more than $950 million.
The CFTC alleges that Cash FX promised participants returns of up to 15% per week by trading their money through expert traders, proprietary algorithms, and artificial intelligence. However, the agency claims that the firm conducted minimal forex trading and misappropriated nearly all participant funds.
According to the complaint, Cash FX directed participants to send funds described as bitcoin to wallets on the blockchain, and then used those funds to pay fictitious profits to earlier participants while directing millions of dollars to each defendant's personal accounts. The agency also alleges that Lopez controlled the wallets that received participant bitcoin and routed funds to his own personal account, including one held at a major cryptocurrency exchange in the name of his wife or girlfriend.
The CFTC is seeking restitution, disgorgement, and civil monetary penalties, along with trading and registration bans and a permanent injunction. The agency's Director of Enforcement, David I. Miller, stated that 'the Division of Enforcement has continued to refocus on its core mission of protecting the public from fraud and manipulation.'