The U.S. Commodity Futures Trading Commission (CFTC) has taken legal action against Vista Network Technologies, a California-based company, alleging that the firm defrauded investors and embezzled over $7 million worth of cryptocurrencies. According to the complaint filed in the District Court for the Eastern District of New York, Vista’s CEO, Armen Temurian, misappropriated digital assets belonging to his clients.
The CFTC alleges that between September 2017 and January 2018, Temurian promised investors that Vista would use their bitcoins and ethers to trade and generate a daily profit of 2.5% or double their investment within 80 days. However, Vista never traded client assets and had no trading program in place. Instead, Vista operated like a pyramid scheme, using new investors’ crypto assets to pay out profits to earlier investors.
The CFTC is demanding that Vista returns all illegally obtained funds to investors and that the founder of Vista is subject to an administrative fine. The agency is also seeking to prevent Temurian from establishing similar companies to avoid future violations of the Law on Commodity Exchanges and CFTC rules.
Acting Director of CFTC Enforcement, Gretchen Lowe, stated that the regulator has the tools to hold accountable those who commit illegal acts in the digital asset space. This case proves that the CFTC is dedicated to protecting retail investors from cryptocurrency fraud. The CFTC Chairman, Rostin Behnam, recently announced that the regulator will increase its oversight of the crypto asset industry this year and called on lawmakers to develop regulations to govern the sector.