- They defrauded investors of over $5 million
- The defendants were supposed to buy the BTC and then hold on to it
- But investors never saw any dividends or cryptocurrency
The Commodity Futures Trading Commission (CFTC) issued a ruling yesterday, July 6 in the Randy Craig Levin and Philip Reichental of Florida. The defendants orchestrated a scheme to extort funds for allegedly investing in bitcoins. The damage from their actions is about $5 million.
This situation took place in 2018. Reichental tricked investors into giving about $5 million to allegedly buy BTC from Levin. It is unclear what role the latter played in the scheme.
The two defendants assured that depositors would make a “significant profit.”. Of course, they never saw any BTC, dividends or initial investment.
The reason for the CFTC proceeding were numerous complaints from defrauded customers. As it turned out, Reichental was a licensed practicing attorney, which apparently helped him attract new victims.
According to the ruling, both defendants must pay a total fine of $5.4 million.. They are also prohibited from trading in the futures market or applying for a license from the CFTC.
“The Commission will continue to devote significant attention and resources to combating digital asset fraud. This case is particularly significant because one of the perpetrators was a lawyer who used his knowledge for illegal purposes,” spokesman Ian McGinley.
If we are talking about buying BTC rather than futures contracts, why is the CFTC taking enforcement action in that case? Simple, bitcoin is nearly the only cryptocurrency for which the federal government has decided on a classification.. Consequently, it is in the jurisdiction of the first agency, regardless of whether it is a spot or futures market.
It is in the jurisdiction of the first agency.