The Commodity Futures Trading Commission (CFTC) has filed charges against four individuals and their unincorporated entity, Fundsz, for fraudulent activities related to cryptocurrencies and precious metals trading.
The defendants, Rene Larralde from Melbourne, Florida, Juan Pablo Valcarce from West Melbourne, Florida, Brian Early from New Orleans, Louisiana, and Alisha Ann Kingrey from Franklin, Arkansas, are accused of misleading investment solicitations through Fundsz. They allegedly promised investors implausible returns using a so-called “proprietary algorithm.”
According to the complaint lodged in the U.S. District Court for the Middle District of Florida, the defendants lured customers by promising consistent 3% weekly profits from cryptocurrency and precious metal trading. They falsely portrayed Fundsz as a profitable venture, claiming that a $2,500 investment could grow to $1 million in just 48 months. The accused also falsely associated Fundsz with charitable initiatives, exploiting the appeal of contributing to humanitarian causes.
The CFTC asserts that the defendants managed to attract over 14,000 individuals by fabricating weekly returns. However, the commission found that Fundsz did not actually trade customer funds, and the entire operation appears to have been built on fictitious profits and deceptive claims.
Judge Wendy Berger of the U.S. District Court issued a unilateral statutory restraining order, freezing the defendants’ assets and appointing a temporary receiver. A preliminary injunction hearing is scheduled for August 23, 2023.
The CFTC’s ongoing litigation aims to pursue restitution for defrauded investors, forfeiture of ill-gotten profits, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against future violations of the Commodity Exchange Act (CEA).
Fundsz, which claims to be a decentralized platform using “revolutionary” blockchain technology, has been soliciting participants since October 2020. The CFTC alleges that the defendants made up and reported fictional weekly returns to their clients and deliberately misrepresented Fundsz as having a charitable purpose.
Ian McGinley, the agency’s director of enforcement, emphasized that the CFTC will continue to “root out” bad actors in the cryptocurrency and precious metals markets. He also reminded the public that “if something sounds too good to be true, it probably is.”
This legal action by the CFTC highlights the ongoing efforts by regulatory bodies to clamp down on fraudulent activities in the rapidly evolving cryptocurrency space. It serves as a stark reminder to investors to exercise caution and conduct thorough due diligence before engaging with investment platforms promising extraordinary returns.
