CFTC files complaint against 4 individuals and their entity Fundsz in fraudulent investment scheme

Last week, the Commodity Futures Trading Commission filed a complaint against – and sought to freeze the assets of – 4 individuals and their entity Fundsz. The complaint charged the defendants with fraudulently soliciting clients to purportedly trade in cryptocurrencies and precious metals.

Fundsz claimed to produce returns of 3% per week by trading crypto and precious metals by using a “proprietary algorithm.” It also advertised that an initial investment of $2,500 would grow into $1 million in 48 months with no additional deposits. The CFTC alleges that the scheme did not actually trade customer’s deposits, and any returns were fabricated.

Fundsz also falsely implied that the investments would support charitable organizations working in the clean water, humanitarian, and disaster relief sectors. 

This pitch was successful, as the defendants claim to have more than 14,000 participants. But in reality, the complaint alleges, Fundsz does not trade customer funds at all, and any customer gains are illusory, as the defendants simply make up fictional weekly returns to report to customers. 

TRM’s blockchain intelligence reveals the various entities that sent funds to Fundsz, including some major exchanges, a high-risk exchange, and a payment processor.

“The CFTC continues to root out individuals who defraud customers in the cryptocurrency and precious metals markets,” said Director of Enforcement Ian McGinley. “Though the products fraudsters purport to trade and their methods of attracting victims—in this case through social media—may have changed, the old adage ‘if something sounds too good to be true, it probably is’ remains as valid as ever.”

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