CFTC files charges against four defendants in bitcoin investment fraud suit
September 14, 2020, 2:05PM EDT
1 min read
The Commodity Futures Trading Commission said Monday that it had charged three Texas residents and one Florida resident for their role in defrauding investors of nearly $1 million via an alleged bitcoin investment fraud scheme.
The agency alleged that Joel Castaneda Garcia, Mayco Alexis Maldonado Garcia, Cesar Castaneda, and Rodrigo Jose Castro Molina "falsely represented to actual and potential customers that their business, named Global Trading Club (GTC), employed 'master traders' who had years of experience trading 'crypto currency,' and used 'cutting edge trading robots' to trade Bitcoin for customers '24 hours a day, 7 days a week.'"
"Customers were also falsely promised a bonus for referring others, in the form of a multi-level marketing scheme. To conceal their fraud, the defendants caused misleading trading statements to be posted online," the agency went on to explain.
In sum, 27 investors were impacted by the fraud, taking in "at least $989,000" from those participants.
"The CFTC seeks disgorgement of ill-gotten gains, civil monetary penalties, permanent registration and trading bans, and a permanent injunction against further violations of the Commodity Exchange Act and the Commission’s regulations, as charged," the agency said.
The Global Trading Club brand has previously been identified as a multi-level marketing or Ponzi scam, facilitated by enticing would-be investors with outsized gains. As outlined by BehindMLM.com in a 2016 post, Global Trading Club operates as an affiliate marketing structure whereby participants are encouraged to bring in additional investors — and their funds — into the scheme.