CFTC action against operators of $44M Bitcoin Ponzi scheme gets stayed
The action brought by the Commodity Futures Trading Commission (CFTC) against the operators of a $44 million Bitcoin Ponzi scheme has been stayed. This becomes clear from an order signed Magistrate Judge Sanket J. Bulsara of the New York Eastern District Court on April 25, 2022.
The order was issued several days after the US Government pushed for a stay of the CFTC action against the operators of virtual currency companies EmpowerCoin, ECoinPlus, and Jet-Coin. Accordingly, the CFTC action is stayed pending resolution of the parallel criminal matter.
On March 3, 2022, a grand jury in the Eastern District of New York returned an indictment charging the defendants criminally with wire fraud and wire fraud conspiracy, money laundering and money laundering conspiracy, obstruction of justice, conspiracy to obstruct justice, and tampering with evidence.
Specifically, the indictment alleges that the defendants, residents of New York, North Carolina, and Pennsylvania, defrauded investors and potential investors in a series of web-based virtual currency companies called EmpowerCoin, ECoinPlus, and Jet-Coin.
Among other things, investors in the Virtual Currency Companies were promised that their investments would be used to trade Bitcoin and other virtual currencies and that they would be paid large, guaranteed returns from the profits. In truth, the invested assets were used to repay other investors or stolen. Each of the defendants was intimately involved in the operation of the Virtual Currency Companies.
Defendants Golden and Egerton operated EmpowerCoin and ECoinPlus, while Golden and Aggesen operated Jet-Coin. Each of the Virtual Currency Companies made nearly identical representations to investors and relied on similar (or the same) software. The Virtual Currency Companies collapsed in approximately August 2017, and following their collapse defendants Golden and Aggesen obstructed a Federal Trade Commission (FTC) probe into the Virtual Currency Companies by, among other things, wiping Aggesen’s laptop computer.
Investors in each of the Virtual Currency Companies were located in the Eastern District of New York and elsewhere.