CFTC sues over $3.6M digital asset fraud scheme

The U.S. Commodity Futures Trading Commission (CFTC) has filed charges against a fraudulent trading platform and its associates for defrauding Asian American investors out of $3.6 million.

The scam involved soliciting funds in both fiat currency and digital assets under the guise of trading in commodity futures and foreign exchange contracts.

However, the funds were misappropriated and diverted to offshore entities instead.

The CFTC has taken legal action against Aipu Ltd., Qian Bai, Lan Bai, Fidefx Investments Ltd., and Chao Li, filing a civil enforcement case in the U.S. District Court for the Western District of Washington.

According to the regulator, the defendants used a network of solicitors to deceive at least 32 customers, falsely claiming their funds would be traded on leveraged or margined accounts.

The CFTC's complaint states that the defendants directed investors to transfer their assets through a series of bank accounts and private digital wallets affiliated with the fraudulent entities.

No actual trading occurred, and the funds were siphoned off for personal gain.

The CFTC is seeking several forms of relief, including restitution for defrauded customers, disgorgement of ill-gotten gains, civil monetary penalties, and a permanent trading ban for the defendants.

The lawsuit also requests a permanent injunction to prevent further violations of the Commodity Exchange Act (CEA) and CFTC regulations.

This case underscores the increasing risks of online investment fraud in the digital asset space, as the CFTC continues to pursue legal action against those who exploit vulnerable investors through deceitful schemes.

The agency is committed to holding those responsible accountable and ensuring justice for defrauded victims.