A top US regulator is accusing the Circle Society and its owner David Gilbert Saffron of fraudulent solicitation, misappropriation and registration violations.
The accusation from the U.S. Commodity Futures Trading Commission (CFTC) has to do with a binary options scheme operated by Saffron through Circle Society, a Las Vegas-based business he had set up.
The complaint issued by the CFTC alleges that from about December 2017 and onwards, Saffron had used the company to make false claims about his trading expertise to convince at least 14 individuals to invest $11m into the scheme.
He said he would use the money to trade off-exchange binary options on foreign currencies and cryptocurrency pairs, among other things, promising investors 300% return.
However, Saffron is now accused of having put the money into his own e-wallet and to use the funds to pay other participants in a Ponzi scheme-like matter.
“Digital assets and other 21st century commodities hold great promise for our economy,” said Heath P. Tarbert, chairman at the CFTC. “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.”
In its continuing litigation, the CFTC seeks full restitution to defrauded investors, disgorgement of ill-gotten gains, civil monetary penalties, permanent registration and trading bans, and a permanent injunction against future violations of the Commodity Exchange Act and Commission regulations.
Copyright © 2018 RegTech Analyst