Fraudulent Bitcoin Commodity Pool Action by CFTC
The Commodity Futures Trading Commission (CFTC) has taken action against Jacob Orvidas for fraudulent activities related to a bitcoin commodity pool. Here are the key details of the case:
1. **Charges**: Jacob Orvidas was charged with fraudulent solicitation of at least four individuals (pool participants) to trade leveraged bitcoin in a commodity pool. He made false promises of substantial profits and the safety of their investments.
2. **Trading Losses**: Orvidas, after attracting over $2 million from pool participants, incurred significant trading losses, resulting in the near-total depletion of the funds.
3. **Deception**: To conceal these losses, Orvidas provided pool participants with fake spreadsheets that purported to show trading profits and high account balances. He also lied about why he couldn't distribute profits and return their principal.
4. **Registration Violation**: Additionally, Orvidas failed to register as a commodity pool operator, which is a violation of the Commodity Exchange Act.
5. **Penalties**: The CFTC order against Orvidas requires him to pay over $2 million in restitution to the affected individuals and a $500,000 civil monetary penalty. He is also banned from registration and trading for a period of ten years.
6. **Statement**: Ian McGinley, Director of Enforcement at CFTC, emphasized the agency's commitment to protecting ordinary individuals and combating fraud in digital asset markets.
7. **Case Timeline**: The fraudulent activities took place from around October 2017 to at least July 2020.
8. **Assistance**: The CFTC acknowledged the assistance of the Securities and Exchange Commission (SEC) in handling this case.
This case serves as a reminder of the CFTC's commitment to preventing fraud in digital asset markets and its determination to hold individuals accountable for fraudulent activities related to commodities like bitcoin.
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