The US Commodity Futures Trading Commission (CFTC) has initiated a civil enforcement action against Mosaic Exchange Limited and its CEO, Sean Michael, for alleged fraudulent activities in the crypto industry. The defendants are accused of misappropriating funds and deceiving 17 individuals, who invested large amounts in Bitcoin and other cryptocurrencies.
From February 2019 to June 2021, the defendants falsely promoted Mosaic Exchange as a profitable cryptocurrency trading platform, boasting of an 82% accuracy rate and significant profit margins. However, these claims were fraudulent as Mosaic suffered losses in its trading activities and didn’t have the advertised partnerships or broker agreements.
In response to these scams, CFTC Commissioner Kristin N. Johnson emphasized the need for stronger crypto regulations to protect investors. She cited a report by Chainalysis, which identified fraud as the most prevalent form of cryptocurrency crime, leading to over $5.9 billion in losses in the previous year. As a result, the CFTC is seeking various remedies, including restitution, disgorgement, civil monetary penalties, and a permanent injunction against further violations of the Commodity Exchange Act (CEA) and CFTC regulations.
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