The Commodity Futures Trading Commission has filed a complaint in the U.S. District Court for the Middle District of Florida against four individuals and their unincorporated entity, Fundsz, on charges of fraudulent solicitation to trade crypto and precious metals.
Starting in October 2022, Fundsz allegedly solicited participants through claims that it historically produced returns greater than 3% per week using a supposed "proprietary algorithm" as part of its "secret sauce" for crypto and precious metals trading. According to the CFTC, claims were made that a one-time payment of $2,500 to funds could be expected to grow to $1 million within four years.
The CFTC claims that Fundsz did not trade customer funds and reported fictional weekly returns to customers.
Fundsz also allegedly falsely implied that it contributed to charitable efforts.
The defendants — Rene Larralde of Melbourne, Florida, Juan Pablo Valcarce of West Melbourne, Florida, Brian Early of New Orleans, Louisiana, Alisha Ann Kingrey of Franklin, Arkansas, and Fundsz — have been hit with an ex parte statutory restraining order that freezes their assets, preserves records and appoints a temporary receiver.
A hearing on the CFTC's motion for preliminary injunction is slated for Aug. 23.
The agency said the CFTC also seeks restitution to defrauded investors, disgorgement of ill-gotten gains, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against further Commodity Exchange Act violations.
“The CFTC continues to root out individuals who defraud customers in the cryptocurrency and precious metals markets," the agency's director of enforcement, Ian McGinley, said.
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