Control-Finance director Benjamin Reynolds hit with $572 million fine from CFTC

Benjamin Reynolds, the CEO behind the fictional bitcoin scheme, Control-Finance, has now been hit with a $572 million fine, following on from a default judgement made against him by a New York federal judge. Control-Finance had closed its social media pages in 2017. Still, CFTC has been unable to locate Reynolds since June 2019, when his illegal enterprise was uncovered in 2019. The agency, therefore, requested that the New York court settle the case despite Reynolds’ absence.

The complaint against Reynolds was filed in 2019. He has been accused of being the mastermind behind the pyramid scheme, which was promoted fraudulently as a cryptocurrency investment company based in the UK. The initial complaint claimed that Reynolds had misappropriated over 28,000 bitcoin from over 1,000 customers. The quantity of bitcoin obtained by Reynolds is estimated to be worth more than $1.24 billion.

Reynold’s Ponzi scheme worked by luring investors with fabricated trade reports made on a weekly basis. These reports promised investors 45% a month or 1.5% a day to take bitcoin from the victims. From May – September 2017, new participants promised to receive annual returns were advertised profits from a trading pool with no capacity to do so.

CFTC fine

The CFTC said:

While Reynolds represented that he would return all bitcoin deposits to customers of Control-Finance by late October 2017, he never did and instead retained the deposits for his own personal use. Customers lost most or all of their bitcoin deposits as a result of the scheme.

The watchdog service found that Control-Finance worked to launder its stolen funds through a vast number of complex blockchain transactions, with Reynolds even transferring some stolen assets into known offshore tax-havens. Reynolds further convinced his victims of the scheme’s legitimacy by forging UK Companies House files, as also found in the court papers.

The default order for the case has allowed the US authorities to pursue all accessible assets to satisfy any judgments, especially those that remain in America. However, as Reynolds is still missing, the CFTC has warned victims that restitution orders might not result in the recovery of lost money, based on the fact that the scammers may not hold sufficient funds.

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