The CFTC filed a complaint in the U.S. District Court for the Middle District of Florida against Fundsz creators Rene Larralde, Juan Pablo Valcarce, Brian Early, and Alisha Ann Kingrey, accusing them of cryptocurrency fraud.
The office alleges that from October 2020 to the present, the defendants promised investors that investing in Fundsz would earn them returns of more than 3% per week. And a $2,500 lump sum contribution to Fundsz can grow to $1 million within 48 months without additional deposits. Fundsz’s founders also claimed to use a “secret” proprietary algorithm to trade cryptocurrencies and precious metals.
In addition, the defendants made false representations that they had made timely payments to investors for seven years. Fundsz stated that investor contributions have been used to improve the environment, health and education, and humanitarian assistance, including in natural disasters. The founders of Fundsz have managed to engage more than 14,000 people in the project. However, it turned out that Fundsz was not trading clients’ funds – they were provided with fictitious weekly income statements.
The agency is seeking compensation for the defrauded investors, seizure of illegally obtained funds, administrative fines, as well as a permanent injunction against trading and registration so that the defendants do not violate the Commodity Exchange Law in the future. Judge Wendy Berger unilaterally signed a court order freezing the defendants’ assets and appointing a temporary receiver. A hearing on the CFTC’s motion for a preliminary injunction against Fundsz is scheduled for Aug. 23.
The agency recently accused a Tennessee couple of running a $6 million Blessings of God Thru Crypto fraud scheme. In February, the regulator filed charges against Vista Network Technologies related to more than $7 million in cryptocurrency fraud.