Owner of bitcoin trading scheme Control-Finance ordered to pay $572 million

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The U.S. District Court for the Southern District of New York has ordered the operator of bitcoin trading scheme Control-Finance to pay nearly $143 million in restitution and $429 million in penalties.

Benjamin Reynolds allegedly failed to attend multiple court dates in a case from the Commodity Futures Trading Commission (CFTC), resulting in a default judgment against him, according to an announcement from the regulator.

The CFTC first brought the case against Reynolds in June 2019, alleging he utilized a public website, social media and emails to solicit 22,190.542 BTC, or $143 million at the time. He told customers his firm, Control-Finance, employed crypto traders who would trade their deposits for a guaranteed profit.

However, the CFTC alleges Reynolds never made trades on his customers' behalf. He later said he would return all bitcoin deposits by October 2017, but failed to do so, according to the CFTC, and instead kept the deposits for himself.

After Reynolds repeatedly did not appear in court to address the charges, the CFTC proposed a default judgment in August of last year. The proposal included the $572 million in penalties and restitution Reynolds now faces. With the financial penalties, the court order also prohibits Reynolds from trading in CFTC-regulated markets or registering with the CFTC.

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Aug 11, 2021, 5:18PM UTC
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