CFTC Hits Circle Society with $11 Million Fraud Charges

The US Commodity Futures Trading Commission (CFTC) today charged the principle of ‘Circle Society’ with carrying out a fraudulent crypto-binaries scheme while falsely impersonating his trading qualifications in the process.

Through social media and other channels, David Gilbert Saffron of Las Vegas, Nevada, lured members of the public into investing their ‘bitcoins and US dollars’ in a pool of funds that would, in turn, go into trading products like binary options and Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term contracts.

The fraud scheme has been going on since at least December 2017 until the CFTC uncovered the illicit enterprises in September 2019. Not only was Saffron’s business not registered with the relevant US regulators, but he also wasn’t connecting investors to a legitimate Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term.

Now, the agency wants penalties, disgorgement of ill-gotten gains, and permanent injunctions, although there is no guarantee for paying back victims.

CFTC chairman warns about fraudulent crypto investments

Also contained in the complaints filed before the court for the District of Nevada was that Saffron distributed false account statements to fund participants, telling investors that he made gains up to 300 percent from trading forex and binary options.

In fact, he was not only misrepresenting his experience as a traders or portfolio manager but ended up misappropriating these funds, including by “retaining participants’ funds in Saffron’s personal electronic cryptocurrency,” the CFTC said.

Further, when called on by investors to pay out earnings, Saffron returned few amounts to certain customers as purported “profits” in the manner of a “Ponzi” scheme.

Commenting on the trend of crypto-related frauds, CFTC Chairman Heath Tarbert said: “Digital assets and other 21st century commodities hold great promise for our economy. Fraudulent schemes, like that alleged in this case, not only cheat innocent people out of their hard-earned money, but they threaten to undermine the responsible development of these new and innovative markets. America must be a leader in this space, and we will only succeed if these markets have integrity.”