The Commodity Futures Trading Commission (CFTC) sued five Americans who promoted what officials said was a fraudulent Icomtech cryptocurrency scheme that caused more than 170 people to lose money.
The CFTC filed a civil lawsuit in California Central District Court against David Carmona, Juan Arellano Parra, Moses Valdez, David Brend and Marco A. Ruisa Ochoa (Marco A. Ruiz Ochoa), accusing them of organizing Icomtech.
The agency said its target audience was Hispanic communities.
The project managed to raise several hundred thousand dollars from more than 170 users on promises to trade in bitcoins and other cryptoassets.
From August 2018 to December 2019, Icomtech representatives promised investors a daily return of 0.9% to 2.8% of the deposit amount.
Icomtech organizers promised to double the amount available in customers’ accounts after four to eight months of trading.
The defendants did not trade in crypto-assets, the regulator insists.
Investors never received the claimed profit, and representatives of the cryptopyramid simply appropriated client funds, spending them for personal needs.
The CFTC is demanding that the defendants return the funds they received from investors, pay administrative fines, and obtain a permanent injunction to prevent further violations of the Commodity Exchange Act (CEA) and CFTC regulations.
Last year, regulators accused the founder of the Digitex crypto derivatives platform of failing to register and engaging in illegal business activities.
CFTC Commissioner Christy Goldsmith Romero recently warned that the agency will not become more friendly to the crypto industry than the U.S. Securities and Exchange Commission (SEC).