In a recent revelation, the US Commodity Futures Trading Commission (CFTC) has come down hard on a crypto trading platform, Mosaic Exchange Limited, and its owner, Sean Michael, citing fraudulent practices. The CFTC accuses the Pennsylvania-based operation of conducting a fraudulent digital asset commodity scheme from February 2019 to June 2021. This resulted in the misappropriation of hundreds of thousands of dollars worth of Bitcoin and other funds from 17 US residents, and numerous other nationals, under the misrepresentation that these funds would be traded on their behalf.
Mosaic Exchange Limited went so far as to proclaim broker agreements and partnerships with undisclosed Bitcoin exchange giants and boasted an in-house proprietary trading algorithm that supposedly returned 20% to 60% per month. On investigation, the CFTC found these claims to be far from reality and revealed that Mosaic Exchange Limited presented a virtual house of cards, to use the words of CFTC Commissioner Kristin N. Johnson.
On the flip side, Johnson also acknowledges the growing awareness among crypto investors, with a Chainalysis report indicating a 77% decrease in investment scams this year. However, this bright spot in the story seems overshadowed by the sinister revelation about the rise in ransomware; the crypto crime segment has already clocked in $175.8 million more than it did in the comparable timeframe in 2022.
Adding another twist to this narrative, the US Department of the Treasury has imposed sanctions on three over-the-counter (OTC) cryptocurrency traders who allegedly helped the infamous North Korean Lazarus Group convert millions of dollars worth of cryptocurrencies to fiat currency. While it is easy to hail this development as indicative of the effectiveness of increased regulatory scrutiny, one must also consider that the growth of crypto crime shows criminals investing in high-end software to outsmart protective mechanisms.
In a world where investors’ attraction for cryptocurrencies is on an upward trajectory, their safety is increasingly coming under a cloud of ambiguity. Regulatory bodies like the CFTC and the Treasury are stepping up their game, bringing fraudulent practices to heel. At the same time, the persistence of ransomware threat and escalating criminal sophistication points towards choppy waters ahead for unvigilant investors.
Source: Cryptonews
