Announced via a press release last week: the US Commodity Futures Trading Commission (CFTC) has charged owner David Gilbert Saffron of operating a company with a primary purpose of “fraudulent solicitation, misappropriation, and registration violations”.
Like many scams we see upon conviction, it bears a similar name to a known and trusted organisation – this time Circle. Other scams are more overt with their impersonations and misdirection.
According to the CFTC, these illegal activities had started back in December 2017, and saw over $11 millions in funds raised by Saffron had raised in an allegedly fraudulent, binary options scheme operated through the Circle Society company.
These funds were solicited from a minimum of 14 different investors from the US, received after exaggerating and outright lying with claims of up to 300% guaranteed return on investments.
“Rather than using pool participants’ funds to trade in binary options contracts as promised,
the defendants misappropriated funds, including by retaining participants’ funds in Saffron’s personal electronic cryptocurrency wallet and by using funds to pay other participants, in the manner of a Ponzi scheme.
The defendants then lied to participants in order to conceal their misappropriation.”CFTC (press release)
The complaint, originally filed September 30, 2019. Saffron’s assets were subsequently frozen under court order on October 3, 2019 which was later extended through to October 11, 2019. As of writing: “a hearing on the Commission’s Motion for Preliminary Injunction is scheduled for October 29, 2019”.
In its continuing litigation, the CFTC seeks full restitution to defrauded investors, disgorgement of ill-gotten gains, civil monetary penalties, permanent registration and trading bans, and a permanent injunction against future violations of the Commodity Exchange Act and Commission regulations.
“Digital assets and other 21st century commodities hold great promise for our economy…
America must be a leader in this space, and we will only succeed if these markets have integrity”Heath P. Tarbert (CFTC Chairman)
Earlier this year CFTC Chairman Heath P. Tabert proclaimed that ether, the second most prominent cryptocurrency in terms of market capitalisation, was a commodity.
Last month, US-regulated cryptocurrency exchange LedgerX made claims that CFTC chairman Christopher Giancarlo had a negative personal bias and related this to a delay in the approval of a related registration application.