The CFTC sued the cryptocurrency investment project for fraud

nBankruptcy Commentary: The U.S. Commodity Futures Trading Commission and the Securities and Futures Commission jointly issued a statement suing two companies and chief executives for allegedly encrypting monetary fraud, including misappropriation of financing and abscondment. Regulators said future ICO issued tokens may be treated as commodities, which will be carefully screened for various activities to distinguish between regulatory applicability and fraud.n
nTranslation: Annie_Xun
The U.S. Commodity Futures Trading Commission (CFTC) filed two lawsuits against investment projects involving cryptocurrencies.n
Both cases were submitted to the United States District Court for the Eastern District of New York, the United States, the latest step in the United States derivatives market regulators closely monitoring cryptocurrency activities, which treat cryptocurrencies as commodities.n
The CFTC and the Securities and Exchange Commission (SEC) issued a joint statement on the lawsuit stating that the direct sponsors are Stephanie Avakian, Steven Peikin, SEC Co-Enforcement Officer and James McDonald, CFTC Enforcement Officer.n
n”When market participants engage in fraud that is concealed by digital instrumentation, whether it is called virtual money, tokens, or something similar, the SEC and the CFTC all see through their form and look at the substance of the activity, prosecuting violations of the federal securities and commodity laws .SEC and CFTC law enforcement agencies will continue to deal with violations, stop related activities, to prevent digital tool product distribution and sale of fraud. “n
nIn one of the cases, the CFTC asserted that Dillon Michael Dean of Colorado and his firm Entrepreneurs Headquarters Limited obtained bitcoin worth more than $ 1.1 million from 600 people as a collective investment vehicle for interest-rate trading of commodities. Financing for investing in binary futures contracts. However, the CFTC said the defendants had misappropriated the funds.n
In the second case, Patrick Kerry McDonnell of CabbageTech was indicted by the CFTC on the charge of absconding with consumer digital assets.n
The agency said McDonnell is branded as a cryptocurrency investment expert whose trading advice can provide an attractive return on investment. For example, in one case the agency said, McDonnell had a 300% return on his trading advice.n
Regulators said that after consumers obtained their consulting services in cryptocurrencies and cash, the defendants cut off communications with consumers and “appropriated” funds directly.n
In two cases, the CFTC said neither of the defendants and their companies had been registered with the regulator. Reuters reports that another CFTC case is still under file.n
These cases are not the first time the agency has concluded that cryptocurrencies are unlawful. Last year regulators sued another person for bitcoin Ponzi schemes.n
In addition, last year the CFTC also said that future ICO issued tokens may be treated as commodities.n

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