The Commodity Futures Trading Commission (CFTC) has filed a lawsuit against Fundsz and a number of individuals involved in the fraudulent scheme.

The CFTC complaint, filed in the Florida Middle District Court, alleges that, from at least October 2020 through the present, defendants Rene Larralde, Juan Pablo Valcarce, Brian Early, and Alisha Ann Kingrey, individually and as principals and agents of an unincorporated entity called Fundsz, have fraudulently solicited, accepted, and pooled potentially millions of dollars of contributions from more than 14,000 members of the general public to purportedly trade cryptocurrencies and precious metals in the Fundsz “passive income platform” they operated.

The CFTC complaint further alleges that the defendants have made misrepresentations of material fact when soliciting funds from existing and prospective participants, such as falsely claiming that they profitably traded cryptocurrency and precious metals, earning on average more than 3% per week with the participants’ money, when in fact they did not trade at all.

Defendants also made other misrepresentations of material fact, including that Fundsz had made on time and accurate payments to participants for over seven years, and that the prices of cryptocurrencies like bitcoin and ether, also known as digital asset commodities, were increasing dramatically during periods in which the prices of those coins had actually fallen.

And upon receiving subpoenas from the Commission, Defendants halted participant withdrawals, took down their social media presence, and began a campaign to eliminate Fundsz’s presence on Facebook and YouTube.

The CFTC claims that the defendants have engaged, are engaging, or are about to engage in violations of the Commodity Exchange Act (“Act”), 7 U.S.C. §§ 1-26 and CFTC Regulations (“Regulation”), 17 C.F.R. pts. 1-190 (2022), including, but not limited to: the employment, or attempted employment, of manipulative or deceptive devices and contrivances, in violation of Section 6(c)(1) of the Act, 7 U.S.C. § 9(1), and Regulation 180.1(a)(1)-(3), 17 C.F.R. § 180.1(a)(1)-(3) (2022).

The CFTC seeks civil monetary penalties and remedial ancillary relief, including restitution to defrauded participants, disgorgement, pre- and post-judgment interest, and such other equitable relief as the Court may deem necessary.