Release Number 8798-23
CFTC Charges Four Individuals and a Seychelles Company with Operating a Fraudulent Digital Assets Trading Scheme and Misappropriation
September 29, 2023
Washington, D.C. — The Commodity Futures Trading Commission today filed a civil enforcement action in the U.S. District Court for the District of New Jersey charging fraud against Or Patreanu of Israel, Snir Hananya of Italy, Elijah Samson of Germany, Artem Prokopenko of Ukraine, and Expected Value Plus Ltd., a Seychelles company, all d/b/a Trade2Get, Coinbull, Cryptonxt, Tradenix, Cryptobravos, Nittrex, Pinance, and Wobit (collectively, Cryptobravos).
The complaint charges the defendants with fraudulently soliciting and misappropriating tens of millions of dollars from hundreds of individuals in the United States and other countries for Cryptobravos to trade bitcoin and other digital asset commodities for them.
In its continuing litigation, the CFTC seeks restitution, disgorgement, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against further violations of the Commodity Exchange Act (CEA) and CFTC regulations, as charged.
“This case is a triumph of international cooperation,” said Director of Enforcement Ian McGinley. “The roster of agencies who assisted the Division of Enforcement’s investigation makes it clear to fraudsters in our markets that we will pursue them wherever they are located.”
The complaint alleges from approximately January 2017 through October 2021, the defendants operated a global fraudulent scheme based in Israel, Ukraine, Albania, and South Africa, and other locations. The defendants solicited bitcoin and other funds from people, specifically targeting customers in the U.S., to establish managed accounts to purchase, sell, and trade digital asset commodities, including bitcoin. Cryptobravos agents falsely represented, among other things, they would use customer funds to trade bitcoin and other digital asset commodities for the customers; Cryptobravos would generate risk-free returns for its customers; and customers could withdraw their funds at any time.
As alleged in the complaint, the defendants did not trade bitcoin or other digital asset commodities for the customers, and did not earn returns for customers through trading. Instead, the complaint alleges Cryptobravos accepted customers’ funds and refused to return them, often after encouraging customers to withdraw all of their money from their retirement accounts or take out loans to make additional deposits or to pay nonexistent taxes or commissions. The majority of customers who deposited money with Cryptobravos did not have their funds returned.
The CFTC appreciates the assistance of the Alabama Securities Commission.
The CFTC appreciates the assistance of the Albanian Financial Supervisory Authority, Belize Financial Services Commission, British Columbia Securities Commission, Financial Supervision Commission of Bulgaria, Cyprus Securities and Exchange Commission, Czech National Bank, Securities and Futures Commission of Hong Kong, Central Bank of Hungary, Israel Securities Authority, Liechtenstein Financial Market Authority, Ontario Securities Commission, Seychelles Financial Services Authority, South Africa Financial Sector Conduct Authority (FSCA) and the United Kingdom Financial Conduct Authority.
The Division of Enforcement staff responsible for this case are Michael Cazakoff, Jack Murphy, K. Brent Tomer, Lenel Hickson Jr., and Manal M. Sultan.
The Division thanks and acknowledges the assistance of Jennifer Diamond in the Division of Enforcement’s Office of Chief Counsel.
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The CFTC also strongly urges the public to verify a company’s registration with the CFTC before committing funds. If unregistered, a customer should be wary of providing funds to that company. A company’s registration status can be found using NFA BASIC.