The United States Commodity Futures Trading Commission (CFTC) has requested that it be granted a default judgment against Benjamin Reynolds, the alleged founder of ponzi scheme Control-Finance.
The filing requesting a default judgment comes after Control-Finance’s alleged founder and director, Benjamin Reynolds, failed to respond to the regulator’s initial complaint lodged in June 2019.
The CFTC’s original complaint in the US District Court, Southern District of New York alleged that Reynolds misappropriated at least 22,858 BTC from more than 1,000 customers from 1 May 2017. The CFTC simultaneously filed a notice of voluntary dismissal without prejudice against Control-Finance.
The CFTC’s complaint also alleges that Control-Finance claimed to divert customer funds to the trading operations of its expert employees whilst diverting new depositors’ funds to the scheme’s previous investors, i.e. operating a classic ponzi scheme intended to create the illusion of profit built around a purported affiliate program, which was promoted worldwide on Twitter, Facebook, and YouTube.
In September 2017, Control-Finance deleted its website, ceased making affiliate payouts, and deleted advertising content from social media.
While claiming that customer funds would be returned during the following two months, the couple are alleged to have liquidated the 22,858 BTC that they owned for around US$147 million at the time.
Control-Finance allegedly tried to launder the funds through thousands of transactions, and the BTC eventually reached wallets that were kept at the Canadian digital currency exchange CoinPayments.