U.S. Court Fines U.K. Man of $572 Million for Fraudulent Bitcoin Trading Scheme

Benjamin Reynolds, supposedly of Manchester, England, the genius behind a huge bitcoin Ponzi scheme, must pay the CFTC $572 million in fine and compensation after a federal judge in New York entered a default judgment against him. The U.S. CFTC (Commodity Futures Trading Commission) accuses Reynolds of operating a pyramid scheme named Control-Finance. Benjamin Reynolds fraudulently promoted it as a UK-based crypto investment company.

According to a complaint filed in 2019, the fictional CEO gained and misappropriated over 22,800 bitcoin (worth more than $1.24 billion) from more than 1,000 consumers. Control-Finance’s commitments were very appealing and varied from returns of 1.5% per day or 45% per month to risk management based on strategic investments and fundamental analysis. The deceitful scheme ran between May and September 2017, promoting profits from a trading pool that never produced any returns. The participants were assured of receiving guaranteed annual returns while they were tricked into a Ponzi scheme. ‎

Benjamin Reynolds Made 22,190 Bitcoins from 100 Customers

The customers were of the view that their funds were in safe hands; however, in reality, Reynolds received the money and funded it in absolutely nothing. Instead, he kept transferring it to various wallets to fabricate some activity. When a client demanded a withdrawal, he solely employed other clients’ funds in a Ponzi scheme to conceal his profits.

When the circumstances became indefensible and consumers started to command refunds, Reynolds agreed to pay by late October 2017. However, he failed to fulfill his promise. Instead, he employed the funds for his benefit.

Furthermore, Reynolds made 22,190.542 bitcoin, valued at over $143 million at the time, from over 1000 consumers globally. The CFTC represented the name of 169 individuals living in the U.S. After the investigation, the CFTC identifies at least 169 victims and accused Reynolds of fraud and misappropriation charges. They also asked Reynolds to repay almost $143 million in compensation to defrauded consumers and a civil monetary penalty of $429 million, a total of $572 million. Moreover, Benjamin Reynolds may be a fugitive or at least residing outside of the U.S. The CFTC did not indicate where he is based and does not even know his true nationality. Some experts say he may not be one person but a group of people working together to trap innocent people.