CFTC Charges Fundsz and Individuals for Fraudulent Cryptocurrency and Precious Metals Solicitation
Jessie A Ellis Aug 12, 2023 10:30
CFTC files complaint against Fundsz and individuals for fraudulent crypto and precious metals trading. Assets frozen; hearing set for August 23.
The Commodity Futures Trading Commission (CFTC) has filed a complaint against Rene Larralde, Juan Pablo Valcarce, Brian Early, Alisha Ann Kingrey, and their unincorporated entity, Fundsz, in the U.S. District Court for the Middle District of Florida. The complaint, announced on August 2, 2023, charges the defendants with fraudulent solicitation from clients to purportedly trade in cryptocurrencies and precious metals.
According to the complaint, from approximately October 2020 to the present, the defendants solicited participants with claims that Fundsz has historically produced over 3% returns per week using a "proprietary algorithm" for trading cryptocurrencies and precious metals. They described this as their "secret sauce" and claimed that a one-time $2,500 contribution to Fundsz could grow to $1 million within 48 months with no additional deposits.
Furthermore, the defendants pitched Fundsz as if it had a charitable purpose, using the tagline "Fundsz For Your Cause" and falsely implying that contributing to Fundsz would support various humanitarian efforts. However, the complaint alleges that 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.
The CFTC's complaint was successful in obtaining an ex parte statutory restraining order, signed by U.S. District Court Judge Wendy Berger, which freezes the defendants' assets, preserves records, and appoints a temporary receiver. A hearing on the CFTC's motion for a preliminary injunction is scheduled for August 23, 2023.
As part of its ongoing legal actions, the CFTC is pursuing compensation for deceived investors, the return of unlawfully acquired profits, financial penalties, enduring bans on trading and registration, and a lasting order to prevent any more breaches of the Commodity Exchange Act (CEA).
Director of Enforcement, Ian McGinley, commented, "The CFTC remains steadfast in identifying and taking action against those who deceive clients in the realms of cryptocurrency and precious metals. Even if the offerings and tactics of these fraudsters evolve — as seen with their use of social media in this instance — the timeless wisdom that 'when an offer seems too advantageous, it likely has a catch' still holds true."
In addition, the CFTC has disseminated guidance and resources, such as the Precious Metals Fraud Advisory, aiming to inform the public about the risks of fraud in precious metals trading and offering strategies to recognize, sidestep, and report potential deceit.
The public is encouraged to confirm a firm's registration status with the CFTC prior to investing and to alert the Division of Enforcement about any dubious activities or potential breaches of trading regulations.
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