CFTC Files Fraud Charges Against Another Bitcoin Scam

  • CFTC Files Fraud Charges Against Another Bitcoin Scam

CFTC Files Fraud Charges Against Another Bitcoin Scam

The profits Travis-based Coin Drop Markets pledged to earn in the virtual currency market were no drop in the bucket, but, in reality, the company left its investors high and dry, authorities allege.

If that Bitcoin investment company's claims seem too good to be true, maybe they are. DBA Coin Drop Markets (CDM), a NY corporation, charging them with fraud and misappropriation in connection with purchases and trading of Bitcoin and Litecoin.

The Commodity Futures Trading Commission (CFTC) on January 18, 2018 filed a civil enforcement action in the U.S. District Court for the Eastern District of NY against Defendants Dillon Michael Dean of Longmont, Colorado, and his company The Entrepreneurs Headquarters Limited, a UK-registered company.

And in some cases, potential returns of as much as a whopping 300 percent in less than a week were trumpeted, said the complaint.

The CFTC Complaint alleges that from January 2017 to the present, McDonnell and CDM engaged in a fraudulent virtual currency scheme to convince customers to send money and digital currencies to CDM.

Almost all of the pool money was lost, according to the complaint that accuses the defendants of fraud, misappropriation, registration violations and issuing false statements.

Apparently, to hide their tracks the Defendants shut down their website and attempted to scrub all social media materials from the internet in a digital scrubbing.

Virtual currencies such as Bitcoin and Litecoin are not tied to a bank or government and allow users to spend money anonymously.

"Increased public interest in Bitcoin and other virtual currencies has provided new opportunities for bad actors", James McDonald, the CFTC's director of enforcement, said in a press release Friday. According to the CFTC, the agency has taken action against six allegedly fraudulent bitcoin models to date.

Officials said neither McDonnell, Cabbage Tech nor Coin Drop Markets are registered with the Commodity Futures Trading Commission.

In its ongoing litigation, the CFTC seeks restitution to defrauded persons, disgorgement of ill-gotten gains, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against further violations of the Commodity Exchange Act and CFTC Regulations, as charged.

McDonnell and Dean could not be immediately reached for comment on Friday via their company websites, which appeared to have been taken down.