The CFTC issued two filing and settlement orders against Randy Craig Levine and Philip Reichenthal. In 2018, the men orchestrated a multimillion-dollar bitcoin fraud scheme by convincing several investors to send Reichental more than $5.3 million to buy BTC from Levin.
The regulator alleges that as legal counsel, Reichental abused his knowledge and positioned himself as an escrow agent. Reichental made false statements to investors that he would hold their funds in escrow accounts until investors received bitcoins to be purchased from Levin. After receiving money from gullible depositors, the lawyer transferred these funds to the accounts of his accomplice.
Promised bitcoins were never transferred to defrauded investors. The regulator ordered Reichental and Levin to pay investors about $5.4 million in compensation as part of the settlement.
<blockquote
“We continue to root out fraud in the digital asset space.. This case was particularly reprehensible because one of the fraudsters was a lawyer and took advantage of people’s trust,” said Ian McGinley, head of enforcement at the CFTC.
The media recently reported that the CFTC is preparing to file a lawsuit against bankrupt cryptocurrency lender Celsius and its former CEO, Alex Maszynski. Earlier the agency took action to recover $54 million from the organizer of the fraudulent cryptocurrency scheme Q3 Trading Club.