CFTC sues Cash FX and three individuals over an alleged $950 million crypto-related Ponzi scheme.

The U.S. Commodity Futures Trading Commission (CFTC) announced it has filed a lawsuit against Cash FX Group and three individuals, accusing them of running a $950 million-plus investment scam involving cryptocurrency. The defendants include Cash FX and its CEO Huascar Jose Lopez Castillo (Brazil), The Conversion Pros and its CEO Ronald Pope (Oregon), and Justin Halladay (Florida). The complaint was filed Friday with the U.S. District Court for the Middle District of Florida. The CFTC alleges the defendants operated a multi-level marketing Ponzi scheme, raising and accepting over $950 million in funds under the pretense of trading retail foreign exchange contracts in commodity pools. The CFTC states the defendants falsely claimed funds were managed by professional traders, proprietary algorithms, and artificial intelligence, promising returns of up to 15% weekly. In reality, Cash FX conducted minimal foreign exchange trading, misappropriated most participants' funds, used new investors' contributions to pay out fictional trading profits, and transferred millions of dollars to each defendant. The defendants also provided participants with false accounting statements, resulting in at least $406 million in investor losses.