CFTC Wins Case Against Malicious Bitcoin Promoter Who Dipped from Trial
The U.S. Commodities Futures Trading Commission has ascertained a court order against a New York man found guilty of running a bitcoin-centric swindling operation in which he defrauded investors via “vicious fraud.” The man, Patrick McDonnell, has been ordered by a Brooklyn judge to pay restitution and penalties accordingly. He had previously argued the CFTC had no legal purview over his business.
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‘Pay Up,’ Judge Tells Fraudster
In a new decision, the CFTC won a decisive ban against Patrick McDonnell’s CabbageTech Corp., the operator of the illegally-deemed Coin Drop Markets, which Brooklyn U.S. District Judge Jack Weinstein has affirmed as preying on would-be cryptocurrency investors.
The CFTC had first charged McDonnell with escaping with clients’ digital assets back in January 2018.
McDonnell had originally offered Coin Drop Markets investors returns of 300 percent. Inaugural complaints arose after McDonnell broke off communications with investors after they had already invested money in his ploy, among other abuses.
As the CabbageTech maestro’s case developed, McDonnell, in his ill-advised capacity as his own lawyer, initially argued that the CFTC lacked the authority to ban his company. Judge Weinstein ultimately disagreed with that argument, though it didn’t matter in the end, as Weinstein gave a default ruling against the fraudster, who had stopped showing up to the trial’s proceedings. As such, the judge determined that the McDonnell was on the hook for over $870,000 USD in penalties and more than $290,000 in restitution.
The judgment marks the CFTC’s latest successful flex against malpractice in the cryptoverse.
CFTC More and More Active in Crypto, No Turning Back
Gone are the days where the CFTC and other regulatory bodies in the United Sates could afford to ignore the cryptoverse.
The agency’s commissioners have acknowledge that crypto isn’t “going away,” and they’re acting accordingly. The commission recently issued a directive on crypto derivatives and launched an investigation into possible price manipulation practices in the space. It’s sent out subpoenas to Bitfinex and Tether as well.
The body has also participated in related congressional hearings as of late and has greenlighted crypto trading among its employees earlier in the year. It’s on the lookout for cryptocurrency pump and dumpers, too, having offered a bounty cut to anyone who can provide information leading to the bust of crypto P&D groups.
The more proactive stance will be par for the course for the CFTC going forward.
What’s your take? Is the CFTC’s increased activity a good or bad thing in crypto? Let us know in the comments below.
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