The U.S. Commodity Futures Trading Commission (CFTC) is reportedly seeking $572 million in penalty and restitution from the owner of "fraudulent" bitcoin trading scheme Control-Finance.
FinanceFeeds reported the news on Friday, citing a proposed default judgment filed by the CFTC with the New York Southern District Court on Thursday. Per the judgment, Control-Finance owner and sole director Benjamin Reynolds will have to pay $429 million in penalty and $143 million in restitution, as he failed to appear or answer the CFTC’s complaint originally launched in June 2019.
Reynolds is accused of having misappropriated at least 22,858.822 bitcoins — worth at least $147 million at the time, and now worth more than $270 million — from more than 1,000 customers through a pyramid scheme called the Control-Finance “Affiliate Program.”
During 2017, Reynolds fraudulently collected bitcoin deposits from customers and promised them trading returns of up to 45% per month. “In reality, the defendants made no trades on customers’ behalf, earned no trading profits for them, and misappropriated their Bitcoin deposits,” the CFTC said in the complaint at the time.
According to Thursday’s proposed default judgment, Reynolds will also be permanently prohibited from trading bitcoin.