On Friday the CFTC announced that Jacob Orvidas from Utah, United States, had conducted a leveraged Bitcoin fraud scheme from October 2017 to July 2020. At least four pool participants lost money in the process. As a result, the CFTC order imposed a $2 million restitution and $500,000 civil monetary penalty, as well as a cease and desist order and a warning about future violations of the Commodity Exchange Act.
The commodities regulator revealed that Orvidas had solicited money from the traders and ran an unregistered commodity pool. He also lied about the losses suffered and availability of the pool participants’ money, and promised them to trade leveraged BTC on their behalf, misrepresenting his trading prowess.
Market experts have criticised the CFTC’s regulation by enforcement approach. Jake Chervinsky, Chief Policy Officer and crypto advocacy group Blockchain Association, highlighted this on Twitter.
The CFTC charges and settlement with Orvidas follow the regulator’s simultaneous filing and settlement against operators of three decentralised finance (DeFi) on Thursday. The Commission said Opyn, Inc., ZeroEx, Inc., and Deridex, Inc had violated the law by offering illegal crypto derivatives trading to customers.