CFTC Sues Cash FX Group Over Alleged $950 Million Forex Ponzi Scheme
Summary
- The U.S. CFTC said it has sued Cash FX Group, a forex investment firm that allegedly raised about $950 million, on charges of running a Ponzi scheme.
- Cash FX allegedly solicited digital assets by claiming it would invest in forex trading using professional traders, proprietary algorithms and artificial intelligence (AI), while promising returns of as much as 15% a week.
- The CFTC said its investigation found little to no actual forex trading and that investor funds were diverted to other uses.
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The Commodity Futures Trading Commission has sued Cash FX Group, a forex investment firm accused of running a Ponzi scheme that raised about $950 million.
Cointelegraph reported on September 26 that the CFTC filed the lawsuit in the U.S. District Court for the Middle District of Florida against Cash FX and related parties, including Chief Executive Officer Huascar Jose Lopez Castillo.
The CFTC alleged that the defendants operated a Ponzi scheme through a multi-level marketing structure, raising more than $950 million in digital assets from investors under the guise of forex trading. They allegedly claimed to use professional traders, proprietary algorithms and artificial intelligence to manage the funds, while promising returns of as much as 15% a week.
The agency said its investigation found little to no actual forex trading and that investor funds were diverted to other uses.
"The Division of Enforcement is refocusing on its core mission of protecting the public from fraud and market manipulation," David Miller, the CFTC's enforcement director, said. "This action shows our firm commitment to pursuing large-scale fraud wherever it occurs."
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