CFTC Sues Cash FX Group and Three Individuals Over $950 Million Crypto-Linked Forex Scheme

The Commodity Futures Trading Commission (CFTC) has filed a lawsuit against Cash FX Group and three individuals in connection with a $950 million foreign-exchange investment scheme that involved cryptocurrency.

The defendants, which include Cash FX's CEO Huascar Jose Lopez Castillo of Brazil and two other companies and their CEOs, allegedly operated a multilevel marketing Ponzi scheme. They solicited over $950 million from investors for the purpose of trading retail foreign currency contracts in a commodity pool.

The CFTC alleges that the defendants falsely claimed pool funds were handled by expert traders, proprietary algorithms, and artificial intelligence, promising up to 15% weekly returns. However, Cash FX engaged in minimal forex trading and misappropriated most of the participant funds.

The agency claims that new contributions from participants were used to pay fictitious trading profits, while millions of dollars were directed towards each defendant. Cash FX also provided false accounting statements to participants, resulting in at least $406 million in losses for investors.