- CFTC, demands that the director of fraudulent firm Control-Finance be declared in default.
- Benjamin Reynolds, and his firm organized a pyramid scheme that allowed them to steal over 22 million BTC.
- The money was then laundered and never returned, while the defendants kept lying to the customers.
The US regulator, CFTC (Commodity Futures Trading Commission) continues to push against the Control-Finance director, Benjamin Reynolds. It has been several months since the regulator got permission to use alternative service on Reynolds. However, the regulator now also wants for an entry of default against the fraudulent crypto scheme director.
The new demand came only yesterday, April 3rd in the documents filed by the CFTC itself. Since Reynolds did not respond to the regulator’s complaint, he will most likely be declared in default.
In addition, the regulator filed another notice at the same time. This second one is a notice of voluntary dismissal of its action against the fraudulent company. Not only that, but the dismissal is without prejudice.
What did Reynolds and Control-Finance do?
The regulator’s complaint claims that the fraudulent company, known as Control-Finance Ltd., spent the last three years exploiting the public. It alleges that Reynolds and his firm used the emerging enthusiasm regarding Bitcoin to their advantage.
The CFTC believes that this has been going on since at least May 1st, 2017, until the present. During this time, Reynolds operated a fraudulent scheme, which allowed him to misappropriate millions of BTC. The exact amount, according to the CFTC, is 22.858,822 coins, taken from over 1,000 customers. Their total valuation exceeds $147 million.
The regulator continues by claiming that the defendants diverted new customers’ Bitcoin deposits to their other users. They did so under claims that the new coins were profits that they generated through trading. They used many websites, including their own Control-Finance site, as well as social media.
The scam continued even after the site disappeared
The sites served to construct a pyramid scheme that they called their business’ Affiliate Program. Then, without any prior warning, they terminated operations on September 10th, 2017. Around that date, the Control-Finance website disappeared from the internet. The payments to customers stopped, and all advertisement content disappeared from social media.
However, the site operators kept tricking the customers. They claimed that the users’ BTC deposits will return by October/November 2017. This, of course, did not happen. Instead, the defendants laundered the money in thousands of transactions, sending it through various wallet addresses.