The Commodity Futures Trading Commission (CFTC) has filed a complaint against Armen Temurian and his company, Vista Network Technologies.

The complaint, submitted on February 15, 2023, at the New York Eastern District Court, alleges that from at least September 2017 through January 2018, Temurian and Vista, and others acting on their behalf or under their control, engaged in a scheme whereby they intentionally and/or recklessly made false or misleading material representations or disseminated false or misleading material information to the retail public in connection with the sale of digital assets that are commodities, such as Bitcoin and Ether.

Specifically, Temurian and Vista fraudulently induced retail investors to transfer Bitcoin and Ether to Vista by falsely promising that Vista would trade those digital assets and that the Investors would earn a 2.5% daily return on their investment and/or that their digital assets would double in value within 80 days.

Defendants directed Digital Asset Commodity Investors to transfer their Bitcoin and Ether to certain digital wallets controlled by Vista. As a result, the Investors transferred over 750 Bitcoin and 2,000 Ether—during the Relevant Period, worth over $6,000,000 and $1,000,000, respectively—to those digital wallets.

The CFTC complaint alleges that neither Temurian, nor Vista, actually traded any digital assets on behalf of investors. Instead, Defendants’ course of conduct had characteristics of a Ponzi scheme. Specifically, according to Defendants’ own statements and records (viewed in conjunction with public blockchain information), while early Digital Asset Commodity Investors may have been paid back—or even paid profits—many later Digital Asset Commodity Investors did not receive any profits or even their entire original principal. At least some did not receive any assets back at all.

Indeed, consistent with a Ponzi scheme, Defendants’ own statements and records (reviewed in conjunction with public blockchain information) reflect that new investor funds were used to pay old investors.

Therefore, in addition to fraudulently soliciting investor funds, Defendants also misappropriated certain investors’ digital assets by using these assets for purposes other than what Investors intended.

Moreover, in early 2018, some Digital Asset Commodity Investors started to question why they were not seeing the promised return. Around this time, Temurian and Vista offered investors a different opportunity: to buy from Vista a “mini-miner.” Temurian and Vista claimed that the “mini-miner” could mine digital assets—including Bitcoin—from users’ home. This was also false. And Defendants knew it at the time and/or were reckless in not knowing it at the time.

Through the Digital Asset Commodity Scheme, Temurian and Vista engaged in acts and practices which violated the Commodity Exchange Act (“Act”), including Section 6(c)(1) of the Act, 7 U.S.C. § 9(1), and Commission Regulation (“Regulation”) 180.1, 17 C.F.R. 180.1.

The CFTC seeks restitution, civil monetary penalties, permanent trading and registration bans, and such other statutory, injunctive, or equitable relief as the Court may deem necessary and appropriate.