Late last week, the Commodity Futures Trading Commission (CFTC) ordered an individual to pay more than $1.1 million in restitution to his former employer, a Chicago-based proprietary trading firm, and its individual customers. The CFTC order found that between September and November 2017, the individual orchestrated a fraudulent Bitcoin and Litecoin scheme and misappropriated more than $600,000 from his former employer. After the trading firm terminated the individual for the misappropriation of funds, the man continued to fraudulently solicit funds from the firm's customers, obtaining approximately $545,000 from at least five customers to trade virtual currency. The U.S. Attorney for the Northern District of Illinois also filed criminal charges against the man, who pleaded guilty to wire fraud and fraudulent solicitation of funds from investors and was sentenced to 15 months. Also last week, the Colorado Securities Commissioner issued orders to stop 12 unregistered initial coin offerings that are accessible to Colorado residents.
According to court documents published Wednesday, Ripple Labs filed to move the consolidated class action by XRP investors from state court to federal court, arguing federal court is the proper venue based on the U.S. Class Action Fairness Act. The plaintiffs are seeking $167.7 million from Ripple Labs in damages. In other litigation news, China-based Bitmain filed a lawsuit against an anonymous hacker for the alleged theft of $5.5 million worth of Bitcoin and other digital assets. Although Bitmain is a China-based company, the lawsuit was filed in the U.S. District Court for the Western District of Washington.
In Japan, Tokyo police arrested eight men suspected of raising $68.4 million in cash and cryptocurrency. The suspects reportedly raised the cash and cryptocurrency funds through a U.S.-based pyramid scheme. The victims of the scheme recently filed a lawsuit in Tokyo District Court and are seeking approximately $3.2 million in damages. Last Thursday, in Nova Scotia, St. Francis Xavier University was forced to shut down its entire network after discovering that an unknown party was using the network to mine cryptocurrency. According to reports, the university is still working diligently to restore the network and find the individual(s) responsible for the attack.
To read more about the topics covered in this week's post, see the following:
- CFTC Orders Former Virtual Currency Trader to Pay More than $1.1 Million for Fraudulent Bitcoin and Litecoin Scheme
- Colorado Division of Securities continues ICO crackdown with four more cease and desist orders
- Combined Class-Action Lawsuit Against Ripple Moves to Federal Court
- Mining Giant Bitmain Sues Unknown Hacker for Alleged Theft of $5.5 Million in Crypto
- Japan: Tokyo Police Arrest 8 Men Allegedly Involved in $68 Million Crypto Pyramid Scheme
- University shuts down network to thwart Bitcoin cryptojacking scheme
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