The Commodity Futures Trading Commission today filed a complaint in the U.S. District Court for the Southern District of Texas against four individuals for fraudulently soliciting funds from customers to speculate in Bitcoin price movements. The defendants are Texas residents Mayco Alexis Maldonado Garcia, Cesar Castaneda, and Rodrigo Jose Castro Molina, and Florida resident Joel Castaneda Garcia.
The complaint alleges that from at least August 2016 through October 2017, the defendants falsely represented to actual and potential customers that their business, named Global Trading Club (GTC), employed “master traders” who had years of experience trading “crypto currency,” and used “cutting edge trading robots” to trade Bitcoin for customers “24 hours a day, 7 days a week.”
The defendants further falsely represented that customer earnings would increase based on the amount of their deposits. Customers were also falsely promised a bonus for referring others, in the form of a multi-level marketing scheme. To conceal their fraud, the defendants caused misleading trading statements to be posted online.
The complaint further alleges that at least 27 individual customers deposited at least $989,000 with one or more representatives of GTC.
The CFTC seeks disgorgement of ill-gotten gains, civil monetary penalties, permanent registration and trading bans, and a permanent injunction against further violations of the Commodity Exchange Act and the Commission’s regulations, as charged.
The Division of Enforcement staff members responsible for this case are Maura Viehmeyer, James A. Garcia, Aimée Latimer-Zayets, and Rick Glaser