CFTC Indicts Mosaic Exchange Founder for Running Fraudulent Crypto Operations
The US Commodity Futures Trading Commission (CFTC) has announced a civil enforcement action against a crypto trading platform called Mosaic Exchange Limited and its owner, Sean Michael.
In a press release dated September 27, the CFTC disclosed that the Pennsylvania-based limited liability company and its founder operated a fraudulent digital asset commodity scheme.
This occurred from February 2019 to June 2021 before their actions drew the agency's attention.
The US agency stated that the cryptocurrency exchange advertised itself as a genuine Bitcoin trading operation with tens of millions of dollars in assets under management (AUM).
Under this guise, it fraudulently obtained hundreds of thousands of dollars worth of Bitcoin and other funds from 17 US residents and other nationals to trade the crypto market on their behalf.
However, contrary to its claims, the received funds were misappropriated.
Providing more details, the CFTC said the fraudulent crypto operation was able to lure its victims with claims of operating an in-house proprietary trading algorithm. This would purportedly deliver monthly returns ranging from 20% to 60% per month.
But that's not all. Mosaic Exchange Limited went further by claiming broker agreements and partnerships with undisclosed Bitcoin exchange giants.
Upon investigation, the CFTC found that the cryptocurrency operation was far from legitimate and never possessed the millions of dollars in AUM it claimed.
Furthermore, the government agency revealed that the crypto exchange had no valid broker agreements with other crypto entities and acted independently.
In a separate statement, Commissioner of the CFTC Kristin N. Johnson labeled the entire Mosaic Exchange incident a virtual house of cards.
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