CFTC Slaps Lawsuit on Former Deutsche Bank Investment Banker for Defrauding Investors
In a recent development, the U.S. Commodities and Futures Trading Commission (CFTC) slapped a civil enforcement lawsuit on against Rashawn Russell, a former Deutsche Bank investment banker, in the US District Court for the Eastern District of New York.
The filing alleges that Russell fraudulently convinced retail investors to invest in his crypto trading fund. Also, the US derivatives regulator has charged Russell of conducting a wire fraud and defrauding investors of nearly $1 million in the process.
The press release notes that Russell convinced investors for investing their Bitcoin, Ether, and other fiat currencies in his purported proprietary crypto trading fund in the period between November 2020 to July 2022. Besides, he also guaranteed investors that they would not suffer any losses while promising a massive 25% returns on their investment.
The complaint also charges Russell with intentionally making false as well as misleading statement regarding the structure, size, and performance of the fund. Besides, Russell faces charges of making false promises to make withdrawal requests along with compensating investors in USDC. Russell then used these funds to pay for his personal expenses along with making Ponzi-like payments to investors as well as entities tied to gambling activities.
In the litigation action on Russell, CFTC is seeking restitution, disgorgement, civil monetary penalties, and permanent trading and registration bans along with permanent injunction against further violations of the Commodity Exchange Act (CEA) and CFTC regulations.
Speaking on the development, CFTC’s Director of Enforcement Ian McGinley was quoted saying: “As today’s action demonstrates, the CFTC is unrelenting in holding bad actors accountable and protecting retail investors from fraud in the digital asset space.”
The development comes at a time when US regulators including the CFTC have been going after crypto firms in a major crackdown within the crypto space. Recently, the US CFTC has been adamant on treating certain cryptocurrencies as commodities.
The CFTC has been recently on crossroads with the US SEC over treating of Ethereum as a commodity. While the SEC claims its jurisdictional right over all staking assets, the CFTC said that its platform has been facilitating Ethereum derivative products for two years now and thus, it holds the right to its jurisdictions.
The lack of regulatory clarity in the US is one of the major concerns shared by crypto firms which forces them to see at countries elsewhere.