The Commodity Futures Trading Commission (CFTC) recently charged four people for involvement in a fraudulent crypto and precious metals trading scheme.
On Aug. 11, the CFTC filed a complaint against Rene Larralde, Juan Pablo Valcarce, Brian Early, and Alisha Ann Kingrey for fraudulent solicitation.
According to the agency, funds were solicited from unwitting customers under the pretext of investing money in crypto and precious metals. The four individuals used a “proprietary algorithm” that guaranteed more than 3% weekly returns.
The CFTC also targeted an unregistered company called Fundsz that the alleged fraudsters had been using as a facade for their activities.
Larralde and his co-defendants allegedly claimed their algorithm could turn a one-time deposit of $2500 into $1 million in just four years. They presented Fundsz as a charitable organization to their unknowing victims with the tagline “Fundsz for your cause.” All contributions made to the fund would support humanitarian causes such as providing clean water or disaster relief efforts, they claimed.
The CFTC estimates that up to 14,000 people were duped. None of the customers received any payments from their investments, with the defendants only creating fake weekly reports to lull the investors.
A U.S. District Court judge issued a statutory restraining order, freezing the assets of the four defendants. The judge has also scheduled a preliminary injunction hearing on Aug. 23, where the CFTC stated it will seek restitution for victims of the scam.
The legal proceedings against Larralde and his associates are the latest in the CFTC’s efforts to stop crypto-related fraud. In July, the agency initiated a lawsuit against a Tennessee couple who allegedly stole at least $6 million from more than 100 real estate clients. Their scheme involved a crypto commodity pool called “Blessings of God Thru Crypto.” It promised investors guaranteed returns from speculating on crypto futures following the advice of a “financial shaman” called Coach Wendy.