Federal Court Fines Operator of Cryptocurrency Fraud $1.1 Million

A New York resident who purportedly operated a Bitcoin Bitcoin While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that Read this Term trading firm was hit with a $1.1 million fine to settle criminal charges in an enforcement action filed in January by the CFTC against a cryptocurrency-related fraud.

The court order, entered by Judge Jack B. Weinstein of the US District Court for the Eastern District of New York, finds that Staten Island-based CabbageTech, doing business as Coin Drop Markets (CDM), and its principal, Patrick McDonnell, were running a fraudulent scheme that involved buying and trading the Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term Bitcoin and Litecoin.

The CFTC alleges that beginning in January 2017 and continuing through July 2017, the defendants conspired to defraud investors by enticing them to send their money to CabbageTech, in exchange for trading recommendations and digital coin purchases under McDonnell’s direction.

Nearly all of the pool money was lost, according to the complaint. The defendants are accused of fraud, misappropriation, registration violations and issuing false statements.

In connection with the promotion of their pool, McDonnell made a series of materially false claims to lure investors interested in ‎digital coins trading. The claim was made that pool participants could get extraordinary investment returns - up to 300% in less than a week.

Instead ‎of using the investors’ monies in trading, the fraudsters ‎misappropriated all of the funds, then removed the website and social media materials and ceased communicating with customers.

Separately, on the same day, the CFTC accused a Colorado businessman and his UK-registered company of violating trading regulations and defrauding at least 600 customers of more than $1.1 million.

As also ‎alleged, he used new investors’ funds to pay back other investors in a Ponzi-‎like fashion, so that they would invest or refer additional money, thereby ‎allowing the scheme to continue for a longer period of time. ‎