The Commodity Futures Trading Commission sued Cash FX Group and three people over an alleged $950 million foreign-exchange investment scheme that used cryptocurrency. The agency filed the complaint Sept. 25 in federal court in Florida, alleging the operation took money from more than 400,000 customer accounts and caused at least $406 million in losses.
The CFTC said more than 6,000 U.S. accounts contributed at least $27 million. The complaint names founder Huascar Jose Lopez Castillo, TCP President Ronald Pope and promoter Justin Halladay as defendants.
Cash FX Allegedly Misrepresented Trading
Cash FX told participants that 70% of their contributions would go toward foreign-exchange trading, while the remaining 30% would fund an “Academy Program” offering trading education, according to the CFTC.
The agency alleges that less than 81% of the money collected was used for forex trading. It also claims some payments to earlier participants came from funds contributed by later participants.
Cash FX also promoted an artificial-intelligence trading system that it said could generate weekly returns of about 10%, the CFTC alleges. The agency claims the system was never operational.
Crypto Wallets Enter Investigation
The complaint identifies cryptocurrency wallets that Cash FX allegedly used to receive participant payments. The CFTC is seeking compensation for affected investors, the return of allegedly obtained funds, financial penalties and permanent trading bans.
The allegations have not been proven in court, and the defendants can respond as the case proceeds.
Related: Bitget Traces $387.5M Crypto Incident, Plans Withdrawal Update by Sept. 26
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