The court in the Southern District of New York обязал the organizer of the Bitcoin pyramid Control-Finance Benjamin Reynolds to pay $143 million in restitution to his clients and $429 million in penalties.
The company’s activities were deemed fraudulent and aimed at misappropriating digital gold by attracting a broad range of investors.
The decision was entered in favour of the plaintiff without a merits hearing, because Reynolds failed to appear at several court hearings in the proceedings with the U.S. Commodity Futures Trading Commission (CFTC).
In June 2019 the CFTC filed a lawsuit against Control-Finance and Reynolds. Reynolds was accused of illegally misappropriating 22,858 BTC from more than 1,000 investors.
From 1 May 2017, the Bitcoin pyramid attracted investments and redirected a portion of new clients’ deposits to other users, issuing bitcoins as profits from trading digital assets.
Around September 10, 2017, payments to Affiliate Program clients ceased. Reynolds deleted the Control-Finance website and the program’s promotional content on social media.
As reported in March 2021, Bloomberg said that CFTC is examining Binance for possible permission for US residents to trade crypto-derivatives without a license.
Follow ForkLog’s Bitcoin news on our Telegram — cryptocurrency news, rates and analysis.