Daily fraud update: 31st October

Hello and welcome to your daily news update on foreign exchange and cryptocurrency fraud.

US court orders fines in forex scam case

A court in the US state of Florida will tell a firm responsible for running a scam forex trading pool that it must hand over millions of dollars.

The US District Court for the Middle District of Florida made the move against Allied Markets after regulator the Commodity Futures Trading Commission (CFTC) pursued an investigation.

Allied Markets has been told that it will need to shell out a civil monetary penalty of around $1.2m.

In addition, it will also need to pay $1.2m in restitution – which means returning the cash to those it defrauded.

The firm will also be prevented from participating in commodities trading in the future, forever.

Earlier this year, two leading figures from the firm – Joshua Gilliland and Chawalit Wongkhiao – were also banned.

The CFTC accuses them of running a forex trading pool which was not legal – and also of carrying out a range of misrepresentations.

In a statement, the CFTC outlined how the fraud was executed and the nature of some of the misuse of funds.

“The orders find that the defendants violated the anti-fraud provisions and registration requirements of the CEA and CFTC regulations in connection with their operation of an illegal commodity pool trading in forex”, it said.

“According to the orders, defendants committed numerous misrepresentations and misappropriated their customers’ funds, using them to pay lavish personal expenses, including gym memberships and luxury car rentals.”

Despite the ruling, the CFTC warned that there was no guarantee that those who lost out financially as a result of the fraud will get their money back.

“The CFTC will continue to fight vigorously for the protection of customers and to ensure the wrongdoers are held accountable”, it added.

Ban on anti-crypto posts in China

A peculiar type of cryptocurrency ban was introduced this week.

China, which is preparing to launch a cryptocurrency of its own and which is known for state-sponsored censorship, banned anti-crypto discussion on the internet.

It instituted a policy of removing online posts which were critical of the concept of crypto – and it refused to permit those which made the argument that blockchain is fraudulent.

The government also appeared to be going on the offensive, by offering adverts to internet users which appeared to emphasise opportunities such as blockchain courses.

It is understood that the country’s president, Xi Jinping, is very much behind the idea of cryptocurrencies.

In a statement to The Independent newspaper, Nigel Green – who serves as CEO of deVere Group – claimed that Xi was on a trajectory towards acceptance of the technology.

“This is a clear signal that the leader of the world’s second-largest economy is moving towards embracing the technology – in which Bitcoin plays a vital part – and therefore taken as a positive boost for the whole digital currencies sector”, he was quoted as saying.

Chris Lee

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