Digital Currency Operators Sued By US Federal Derivatives Watchdog

Crime, Investing, News | January 19, 2018 By:

The Commodity Futures Trading Commission has sued three cryptocurrency operators in a New York district court, alleging fraud and trading rules violations. The suits are the first actions by the CFTC since permitting the launch of bitcoin futures exchanges last month.

In the first case, the CFTC charged Patrick McDonnell of New York and his company, CabbageTech, with robbing customers that signed up for digital currency trading.

The second saw the CFTC charging Dillon Michael Dean of Colorado and his UK-registered company Entrepreneurs Headquarters with running a Ponzi scheme. The complaint alleges he duped more than 600 investors out of $1.1 million in bitcoin. He allegedly promised the money would be pooled and invested, but it never happened.

The third case remains under seal. CabbageTech and Entrepreneurs Headquarters both had their web sites down.