CFTC scores win against virtual currency fraud in court

A New York federal court entered final judgment ordering Patrick McDonnel and his New York-based company, Coin Drop Markets to pay $1.1 million in civil monetary penalties and restitution in connection with a lawsuit brought by the Commodity Futures Trading Commission, alleging fraud in connection with virtual currencies, including bitcoin and litecoin.

McDonnell and CDM engaged in a deceptive and fraudulent virtual currency scheme to induce customers to send money and virtual currencies to CDM, purportedly in exchange for real-time expert virtual currency trading advice and for virtual currency purchasing and trading on behalf of the customers under McDonnell’s direction. In fact, these misrepresentations were lies, and McDonnell simply misappropriated customer funds in what the Court found was the “vicious defrauding of customers.”

To conceal their fraudulent scheme, soon after obtaining customer funds, the defendants removed the website and social media materials from the internet and ceased communicating with CDM Customers, who lost most if not all of their invested funds. In addition to requiring defendants, jointly and severally, to pay $290,429.29 in restitution to customers and a $871,287.87 civil monetary penalty, the final judgment imposed permanent trading and registration bans on the defendants, and permanently enjoined them from further violations of the Commodity Exchange Act and CFTC Regulations, as charged.

Read the full release

Related Posts

Previous Post
World’s first blockchain bond raises $80mn
Next Post
Blockchain coalition creates “reserve standard” for decentralized assets

Related Posts

Fill out this field
Fill out this field
Please enter a valid email address.

Menu
X

Reset password

Create an account