The Commodity Futures Trading Commission (CFTC) has filed a civil enforcement action against individuals and entities associated with Cryptobravos. It accuses them of a massive fraud scheme.
The CFTC alleges that the defendants fraudulently solicited and misappropriated tens of millions of dollars from hundreds of individuals worldwide, including the United States, under various trading aliases.
Deceptive Tactics: Cryptobravos' False Promises to Investors
The CFTC filed the complaint in the U.S. District Court for the District of New Jersey. It identifies the defendants as 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 operating collectively as Cryptobravos.
The accused entities are also known by several other trading names, including Trade2Get, Coinbull, Cryptonxt, Tradenix, Cryptobravos, Nittrex, Pinance, and Wobit.
The CFTC alleges that from approximately January 2017 through October 2021, the defendants orchestrated a global fraudulent scheme with operations in Israel, Ukraine, Albania, South Africa, and other locations.
Their mode of operation involved soliciting bitcoin and other funds from individuals, with a particular focus on U.S. customers. The funds were intended for the establishment of managed accounts to engage in the trading of digital asset commodities, primarily bitcoin.
CFTC Seeks Justice: Restitution and Penalties in Cryptobravos Case
Cryptobravos agents falsely represented several key points to potential investors. It included promises that the customer funds would be used for trading activities, assurances of risk-free returns, and claimed that customers could withdraw their funds at any time. However, the CFTC alleges that these representations were nothing but deceptive tactics.
In reality, the defendants did not engage in any trading activities involving bitcoin or other digital asset commodities for their customers. The CFTC claims that they never delivered on the promised returns. Instead, they held onto customer funds.
In many instances, customers were encouraged to withdraw funds from their retirement accounts or take out loans to make additional deposits or pay non-existent taxes or commissions. Most customers who deposited money with Cryptobravos did not see their funds returned.
In response to these allegations, the CFTC is seeking various forms of relief. It includes restitution for victims, disgorgement of ill-gotten gains, civil monetary penalties, permanent trading and registration bans for the accused, and a permanent injunction against any further violations of the Commodity Exchange Act (CEA) and CFTC regulations.
International Collaboration: Agencies Unite to Combat Cryptocurrency Fraud
Ian McGinley, Director of Enforcement at the CFTC, emphasized the international cooperation involved in this case, stating, "This case is a triumph of international cooperation. 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 CFTC acknowledges the assistance of multiple agencies worldwide in their investigation, including the Alabama Securities Commission, Albanian Financial Supervisory Authority, 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, and the Ontario Securities Commission.
The CFTC's Division of Enforcement is leading the case, with Michael Cazakoff, Jack Murphy, K. Brent Tomer, Lenel Hickson Jr., and Manal M. Sultan among the staff responsible for the prosecution. Jennifer Diamond from the Division of Enforcement's Office of Chief Counsel also provided valuable assistance in the investigation.