CFTC Encounters Problem Locating Accused Crypto Ponzi Scammer

CFTC Encounters Problem Locating Accused Crypto Ponzi Scammer

The United States Commodity Futures Trading Commission (CFTC ) has announced its inability to locate Benjamin Reynolds, an entrepreneur who was accused of running a crypto Ponzi scheme worth about $140 million.

As reported by Finance Feeds, the financial watchdog had filed a motion with the New York Southern District Court to extend the 60-day time limit required for a service of process to be effected on him. The service of progress is a notification that legal proceedings have been filed against a party to a case, and by extending it, the CFTC gave the indication that it has so far been unable to find the alleged fraudster.

Siphoning Funds at the Height of the Crypto Boom

Reynolds was the operator of Control-Finance Ltd., a U.K.-based crypto investment firm that first got on the CFTC ’s radar back in June 2019. At the time, the financial regulator filed with the Southern District of New York, claiming that the company had defrauded over 1,000 investors and laundered over 22, 800 BTC.

Per its filing, the CFTC explained that Control-Finance solicited investments from people looking to buy Bitcoin, collecting their cash and holding their digital assets. The company also guaranteed daily trading profits on users’ crypto investments, claiming that it had employed professional traders to pick its positions on the market. Then, to keep customers satiated, the company kept sending portions of investors’ deposits to them, thus misrepresenting those as the profits that the customers were promised.

The CFTC also went after Reynolds directly, stating that he and the company had taken advantage of the fact that people were enthusiastic for Bitcoin and knew little about it between May and October 2017, when the asset saw significant gains and almost hit a $20,000 valuation.

Vanished Without Return

The company eventually took its website down in September 2017, while also suspending payments and deleting all traces of its existence on social media. While it claimed that it would be reimbursing all customers by October or November that year, the CFTC noted that it simply diverted all its laundered Bitcoins and vanished.

In its filing, the regulator sought to get civil monetary penalties from the firm, including “permanent trading and registration bans, restitution, and disgorgement.” However, it has since been unable to get a hold of him. As Finance Feeds explained, the regulator has tried to contact Reynolds via his email address, but it bounced back. They also got word that the Ulsan District Prosecutors’ Office in South Korea had opened investigations into the fraudster, but had also encountered issues with contacting him.

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About Jimmy Aki

Jimmy has been following the development of blockchain for several years, and he is optimistic about its potential to democratize the financial system.

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