CFTC complaint cites [ticker BTC] in alleged $950M Cash FX scheme

The CFTC complaint names Cash FX Group S.A., The Conversion Pros, Inc., Huascar Jose Lopez Castillo, Ronald Pope, and Justin Halladay as defendants, alleging the operation pulled in more than $950 million from over 400,000 accounts between at least June 28, 2019, and at least December 20, 2023.

Bitcoin appears in the filing.

Cash FX represented to participants that 70% of every contribution would go to forex trading and 30% to an “Academy Program,” with returns reaching up to 15% per week. The complaint alleges that the promised trading allocation and returns did not reflect the operation’s actual activity. The complaint alleges Cash FX engaged in “at most, de minimis forex trading,” directing less than 1% of participant funds to actual trading while the whole structure functioned as a multilevel marketing Ponzi scheme — new money cycling to old participants, most funds misappropriated.

Approximately 81% of pool participants collectively lost at least $406 million. Using the filing’s minimum figures, $406 million divided by $950 million is 42.7%; the actual share cannot be determined because the complaint says contributions exceeded $950 million.

The corporate history matters for any recovery effort. Cash FX was incorporated in Panama City, Panama, on May 22, 2018, originally under the name Dulop More Rich Investments, S.A., and didn’t take the Cash FX name until July 24, 2019. The company was legally dissolved and liquidated in October 2022. According to the complaint, it kept operating anyway — continuing nearly fourteen months past its own dissolution through the end of the alleged period.

Lopez Castillo is identified as Cash FX’s chief executive officer. Pope is president and CEO of The Conversion Pros. Halladay led the “Cash FX Power Team.” The business model presented in the complaint is that participants signed up for a forex pool and an education program with returns tied to professional trading and AI. The CFTC’s answer is that sub-1% trading figure.

The complaint was filed September 24. Six days earlier, on September 18, the CFTC had submitted a separate regulatory action covering crypto asset transactions and markets for White House review. CFTC Director of Enforcement David I. Miller said, according to Cointelegraph, “This critical action, and the massive fraud it targets, reflects our steadfast commitment to addressing fraud wherever we find it.”

The remedies sought include injunctions, civil monetary penalties, restitution, disgorgement, rescission, trading and registration bans, and pre- and post-judgment interest. None of that is established. A filed complaint determines nothing about liability and guarantees nothing for participants who lost money.

Bitcoin was trading at $84,984, up 1.0% over 24 hours, per CoinGecko, a figure unrelated to Cash FX.