CFTC Cracks Down on $950M Crypto-Linked FX Scheme

The U.S. Commodity Futures Trading Commission (CFTC) has filed a lawsuit against Cash FX Group and three individuals, alleging they operated a multilevel marketing Ponzi scheme that involved cryptocurrency.

According to the CFTC, the defendants raised over $950 million from participants by promoting a 'commodity pool' meant to trade retail foreign currency contracts. However, regulators claim the defendants misrepresented how investor money was managed and the returns investors were promised.

The complaint alleges that participants were promised returns as high as 15% weekly, but in reality, most of the participant funds were misappropriated rather than used for legitimate trading.

The CFTC claims participants suffered losses of at least $406 million, alongside alleged false accounting statements. The regulator's core allegation is that the defendants operated a multilevel marketing Ponzi scheme and solicited and accepted more than $950 million from participants based on false promises.