CFTC Hits Circle Society with $11 Million Fraud Charges

The fraud scheme has been going on since December 2017 until the CFTC uncovered the illicit enterprises last month.

The US Commodity Futures Trading Commission (CFTC) today charged the principle of ‘Circle Society’ with carrying out a fraudulent crypto-binaries scheme while falsely impersonating his trading qualifications in the process.

Through social media and other channels, David Gilbert Saffron of Las Vegas, Nevada, lured members of the public into investing their ‘bitcoins and US dollars’ in a pool of funds that would, in turn, go into trading products like binary options and forex contracts.

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The fraud scheme has been going on since at least December 2017 until the CFTC uncovered the illicit enterprises in September 2019. Not only was Saffron’s business not registered with the relevant US regulators, but he also wasn’t connecting investors to a legitimate exchange.

Now, the agency wants penalties, disgorgement of ill-gotten gains, and permanent injunctions, although there is no guarantee for paying back victims.

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Also contained in the complaints filed before the court for the District of Nevada was that Saffron distributed false account statements to fund participants, telling investors that he made gains up to 300 percent from trading forex and binary options.

In fact, he was not only misrepresenting his experience as a traders or portfolio manager but ended up misappropriating these funds, including by “retaining participants’ funds in Saffron’s personal electronic cryptocurrency,” the CFTC said.

Further, when called on by investors to pay out earnings, Saffron returned few amounts to certain customers as purported “profits” in the manner of a “Ponzi” scheme.

Commenting on the trend of crypto-related frauds, CFTC Chairman Heath Tarbert said: “Digital assets and other 21st century commodities hold great promise for our economy. Fraudulent schemes, like that alleged in this case, not only cheat innocent people out of their hard-earned money, but they threaten to undermine the responsible development of these new and innovative markets.  America must be a leader in this space, and we will only succeed if these markets have integrity.”

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