The U.S. Commodity Futures Trading Commission (CFTC) has sued Cash FX Group and three individuals over an alleged $950 million foreign-exchange investment scheme that used cryptocurrency to collect funds from participants.

The agency filed its complaint on Sep. 25 in federal court in Florida, alleging that the operation involved more than 400,000 customer accounts and resulted in at least $406 million in losses. 

The CFTC reports that over 6,000 U.S.-based accounts were involved in the scheme, and that at least $27 million was contributed. The defendants in the complaint are Huascar Jose Lopez Castillo, head of Cash FX, and TCP President Ronald Pope and promoter Justin Halladay.

CFTC Alleges Cash FX Misrepresented Use of Funds

According to the CFTC, Cash FX Group told customers that 70 percent of the money they invested would go toward foreign exchange trading and 30 percent toward an “Academy Program” that would be dedicated to educating traders.

But the agency alleges that the company’s practice of the funds was not in accordance with those representations. The complaint alleges that less than 81% of the money collected was used for forex trading.

Some of the payments made to earlier participants were also made with funds contributed by the newer participants, the CFTC alleges. This can lead to issues on how to determine if the returns are coming from actual trading or from customer contributions afterward.

The complaint also included a promotion by Cash FX of an artificial intelligence-driven trading system that it claimed it could deliver weekly returns of approximately 10%. CFTC claims the system was never in use.

Cryptocurrency Wallets Cited in Complaint

The CFTC’s case also prominently includes cryptocurrency transactions. The complaint names wallets used by Cash FX to receive proceeds from participants that are digital-assets wallets.

The agency said that the funds of the customers allegedly came in through the use of cryptocurrency.

The CFTC is asking for a variety of relief, such as payment to affected customers, restitution of money allegedly misappropriated, civil financial penalties on the defendants and a permanent trading ban on the defendants.

The lawsuit is based on allegations by CFTC, and the claims have not been proven in court. As the case moves through the federal court system, Cash FX Group and the individual defendants will be given a chance to respond.

Haider Ali is a cryptocurrency journalist and blockchain news analyst with five years of experience covering breaking news, market trends, regulation, and emerging developments. His work has appeared in The Bit Journal, CoinGape, The Cryptocurrency Post, TronWeekly, and TurkishNYRadio. He specializes in Bitcoin, Ethereum, DeFi, Web3, exchanges, regulation, and financial markets, providing clear, data-driven insights.