CFTC charges two Floridians in $5 million bitcoin fraud

The United States Commodity Futures Trading Commission (CFTC) has charged two residents of Florida with defrauding investors in a scheme totaling more than $5 million.

According to the regulator, in 2018 Philip Reichenthal and Randy Craig Levin organized a fraudulent scheme. They persuaded two separate groups of investors to transfer more than $5.3 million to the first for the purchase of bitcoins from the second.

Philip Reichenthal used his position as a licensed attorney to act as intermediary and guarantor of the deal. He was supposed to hold investors’ funds until they received the bitcoins, but he transferred the assets to Levin.

According to the CFTC, the defendants’ promises were false from the outset. They had no intention of transferring the bitcoins, the agency added.

Reichenthal and Levin were ordered to return the investors’ funds in full. They were also barred from trading on the futures market and from obtaining a CFTC license.

“The Commission continues to root out fraud in the digital-asset space. This case is particularly egregious, given that one of the fraudsters was a lawyer and exploited his status,” said Ian McGinley, head of the CFTC’s Enforcement Division.

Earlier, a U.S. district court in New York ordered Ohio resident Michael Ackerman to pay more than $50 million for alleged fraud involving multi-million-dollar investments in cryptocurrency.

Earlier in June, CFTC head Rostin Benham urged the agency to grant it additional powers to oversee digital assets.