The U.S. Commodity Futures Trading Commission (CFTC) is reportedly unable to find the alleged operator of a cryptocurrency Ponzi scheme worth over $147 million, Benjamin Reynolds.
Financial news outlet FinanceFeeds reports that the CFTC filed a motion with the New York Southern District Court asking it for the service of process on Reynolds by publication on The Daily Telegraph and extended by 61 days the limit by which the CFTC must effect service on him and the scheme, Control-Finance.
In a memorandum sent with the motion, the CFTC explained it tried to serve Reynolds, but noted that the address listed as his “service address” in documents related to Control-Finance didn’t actually exist. The regulator also tried to email Reynolds, but got back an error message indicating the only email address associated with him wasn’t reachable.
Control-Finance was a cryptocurrency Ponzi scheme allegedly operated by Reynolds that was served by the CFTC for “fraudulently obtaining and misappropriating” at least 22,858.82 BTC, then worth $147 million.
Alleged ETH Ponzi Scheme FairWin May Have Snuck Off With User Funds https://t.co/L4dxOMmDQl #Fairwin #Crypto #Scam #Cryptocurrency #Ethereum #SmartContract
— CryptoGlobe (@CryptoGlobeInfo) October 1, 2019
The scam victimized, over 1,000 investors, per the regulator’s complaint. It managed to swindle its victims by claiming they would receive a profit of 1.5% on a daily basis on their investments, amounting to 45% a month. To ensure they felt safe, it claimed to use risk diversification methods that protected users’ bitcoin.
The CFTC reportedly found Control-Finance didn’t use the funds to make a single trade, and instead simply gave its users fake balances on their accounts, and published adulterated reports to trick them into believing they were making a profit.
Over the years cryptocurrency investors have seen a large amount of Ponzi schemes appear, with one of the most well-known ones being BitConnect. Last year, it was claimed a Chinese Ponzi scheme called PlusToken was adding selling pressure to BTC’s price as it was dumping its 70,000 BTC stack on the market.
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