- The U.S. CFTC said it has sued Cash FX Group, a forex investment firm accused of raising about $950 million, over allegations it ran a Ponzi scheme.
- Cash FX said it would manage investor funds using professional traders, algorithms and artificial intelligence (AI), while promising returns of as much as 15% a week.
- The CFTC said its investigation found there was little to no actual forex trading and that investor funds were diverted for other purposes.
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The U.S. Commodity Futures Trading Commission has sued Cash FX Group, a foreign-exchange investment firm accused of raising about $950 million, alleging it operated a Ponzi scheme.
Cointelegraph reported on September 26 that the CFTC filed the lawsuit in the U.S. District Court for the Middle District of Florida against Cash FX and related parties, including Chief Executive Officer Huascar Jose Lopez Castillo.
The CFTC alleges the defendants operated a multi-level marketing Ponzi scheme, raising more than $950 million in digital assets from investors under the guise of forex trading. They also promised returns of as much as 15% a week, telling investors the money would be managed by professional traders using proprietary algorithms and artificial intelligence.
The agency said its investigation found little to no actual forex trading took place and that investor funds were diverted for other purposes.
David Miller, the CFTC’s enforcement director, said the division is refocusing on its core mission of protecting the public from fraud and market manipulation. The action underscores the agency’s determination to pursue large-scale fraud wherever it occurs, he added.
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