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A digital asset fraud has come under the radar of the Commodity Futures Trading Commission (CFTC) involving the deception of a couple of investors. On Friday, the US regulator filed a complaint againstĀ five entities: Aipu Limited,Ā Qian Bai, Lan Bai,Ā Fidefx Investments Limited, andĀ Chao Li. They have been charged with fraud and misappropriation.
Investors Become Target of Crypto Scam
According to the filing details in the U.S. District Court for the Western District of Washington, these individuals and organizations defrauded 32 customers and stole $3.6 million worth of their assets. The scheme had been running since February 6, 2023, when the CFTC initiated legal action. It targeted a specific group of investors, promising trading in commodity futures and foreign exchange contracts.Ā
Investors were encouraged to make their investments with crypto or fiat. Furthermore, they were told that the assets would be traded on leveraged or margined accounts. Rather than do as promised, the individuals behind the scheme misappropriated the funds and diverted them offshore.Ā
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CFTC Request Restitution From Fake Commodity Trading PlatformĀ
To salvage the situation and serve as a warning to other potential scam schemes, the CFTC is asking for restitution to defrauded customers. The regulator also seeks disgorgement of ill-gotten gains, civil monetary penalties, trading bans, and a permanent injunction against further violations of the Commodity Exchange Act (CEA) and CFTC regulations.
Additionally, the US regulator has warned users of online dating and social media platforms about increased scams. Often, these sites lure victims into sending money or crypto assets to fraudulent websites that claim to trade foreign currency exchange contracts, precious metals, and even digital assets. Therefore, netizens are urged to verify such sites before investing.Ā
CFTC Out to Crackdown on Activities of Prediction Markets
Another platform currently under the CFTCās radar is the prediction platform Polymarket. The regulator discovered that these offshore crypto-betting platforms offer derivatives contracts to U.S. customers without proper registration. In a statement, CFTC Chair Rostin Behnam made it clear that these platforms were breaking the law by offering unregistered derivatives contract services.
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Furthermore, he emphasized the need for such firms to comply with US laws. āWe are closely monitoring offshore activities that provide exposure to U.S. customers,ā Behnam said.
