The U.S. Commodities Futures Trading Commission has won a court order to permanently bar the operator of the New York-based firm CabbageTech Corp. for cryptocurrency-related "Bold and vicious fraud," Bloomberg reported August 24.
Earlier this year, Patrick McDonnell, cryptocurrency promoter and operator of CabbageTech Corp., was charged with "Fraud and misappropriation in connection with purchases and trading of Bitcoin and Litecoin." McDonnell subsequently argued that the CFTC did not have the authority to regulate his commercial operations; however, New York district judge Jack B. Weinstein rejected his claim.
In July, Weinstein reportedly held a nonjury trial where he claimed that McDonnell ran a "Boiler room," deceptively luring investors in different states and counties using "Trickery, false statements and misappropriation of funds," Bloomberg notes.
Weinstein delivered a judgement that McDonnell must pay $290,429 in restitution and $871,287 in penalties.
According to Bloomberg, CabbageTech was not represented by a lawyer, as McDonnell claimed he could not afford to pay for counsel.
McDonnell also stopped appearing in court during the trial.
McDonnell was also involved in a different lawsuit by the CFTC against his another company, Coin Drop Markets.
The CFTC claimed in the the lawsuit that customers who paid McDonnell and Coin Drop for crypto trading advice did not receive the advice they paid for, and that McDonnell shut down Coin Drop's website and failed to respond to customers.
The lawsuit also notes that Coin Drop was not registered with the CFTC. Last month, speaking from Capitol Hill, Congressman Bill Huizenga argued that Congress should empower financial regulators such as the U.S. Securities and Exchange Commission and the CFTC to regulate the cryptocurrency market in compliance with the same rules governing other currencies and stocks.
In May, the CFTC chairman Chris Giancarlo said he doesn't see comprehensive crypto legislation coming from the federal level in the near future, pointing out that the statutes by which the CFTC is operating were written in 1935.
New York District Judge Rules That CFTC Can Permanently Ban Crypto Firm
Published on Aug 25, 2018
by Cointele | Published on Coinage
Coinage
Recent News
View All
Blockchain Bites: Bitcoin's Run, Uniswap's Hemorrhaging Value, Anchorage's Banking Bid
Bitcoin is nearing all-time highs in price and market cap last set three years ago.
Japan's megabanks to lead experiment with digital yen
We have, in order, Cheese Bank with a $3.3 million theft, Akropolis with its $2 million loss, Value DeFi with a whopping $6 million exploit and finally Origin Protocol's loss of $7 million.
Number of new Bitcoin addresses spikes amid growing FOMO
Japan's three largest banks, as part of a group of 30 private sector actors, are set to collaborate on an experiment with a digital yen.
Not just Wall Street: Quant trader explains why Bitcoin price is going up
Sam Trabucco, a quantitative trader at Alameda Research, believes four general factors are pushing up the price of Bitcoin.