Alleged Bitcoin fraudster Patrick McDonnell fails to have case against him dismissed

Maria Nikolova

Judge Jack B. Weinstein reaffirms his earlier ruling that the CFTC has the right to prosecute cryptocurrency fraud.

Patrick McDonnell, a defendant in a cryptocurrency fraud case launched by the United States Commodity Futures Trading Commission (CFTC) in January this year, has suffered a defeat, as the Court has rebuffed his motion to dismiss the case against him.

As per the latest filings with the New York Eastern District Court, Judge Jack B. Weinstein affirmed his memorandum & opinion from March this year, which stated that the CFTC has the right to prosecute cryptocurrency scammers because virtual currencies are commodities under the Commodity Exchange Act (CEA). This was a landmark ruling which the CFTC sought to use in other cases against cryptocurrency fraudsters.

McDonnell and his company – CabbageTech, Corp. d/b/a Coin Drop Markets (CDM), have since filed a number of motions in an attempt to dismiss the case. The crux of all these motions was the claim that virtual currencies are not commodities and that the Judge should reconsider his ruling.

As per an Order filed with the Court today, the Judge found that the initial Order should not be modified. That is, virtual currencies are commodities and the CFTC has the right to take enforcement action against scams related to Bitcoin and its likes.

The Judge noted that no valid basis for a change in the Order has been offered.

Let’s recall that, according to McDonnell, the CFTC complaint is “financially and politically motivated created out of thin air to secure the U.S. regulatory sphere surrounding Bitcoin and Virtual Currency markets”. He has also claimed he is “a sacrificed pawn in a bigger game, this case in not about a “so-called” fraud or misappropriation of investor funds, it is about controlling Bitcoin which has become a threat to world financial systems”.

The case is captioned Commodity Futures Trading Commission v. McDonnell et al (1:18-cv-00361).

  • Read this next

    Podcasts, Women of the Industry

    FF Podcast delves into the rise of prop trading as Brokeree releases Prop Pulse

    In the latest FinanceFeeds Podcast, Tatiana Pilipenko discusses Prop Pulse, Brokeree Solutions’ platform for prop firms and retail brokers aiming to delve into prop trading. Offering a flat fee structure, Prop Pulse emerges as a scalable solution in an era where successful traders increasingly prefer prop firms over traditional retail brokers.

    Inside View

    Scalping or day trading?

    Among the many popular trading styles with both beginners and experienced traders are scalping, which allows you to extract small portions of profit from each price movement, and day trading, which aims to trade over a single day. In this article, you will learn what scalping and day trading are and their differences and peculiarities. Ultimately, you will learn what to look for to understand which trading style is right for you.

    Crypto Insider

    Unveiling Plasma Next: INTMAX’s Solution to Scale Ethereum with Stateless Layer

     INTMAX has launched Plasma Next on the mainnet α, a groundbreaking Layer 2 zkRollup, revealed by co-founder Leona Hioki at ETH Denver. This innovation offers scalability with constant costs per block, merging Plasma’s scalability goals with zkRollups’ security.

    Fintech

    Nuam selects Vermiculus for clearing system in Chile, Colombia, and Peru

    “We are proud to deliver a system that plays an integral role in the core of this historical merger, empowering one of Latin America’s most crucial markets with VeriClear’s state-of-the-art technology, together with our deep market expertise.”

    Retail FX

    Moomoo launches super app in Malaysia

    “As an investment platform connecting 21 million retail investors globally, we envision collaborating with exchanges, regulatory bodies, and partners in the visible future to become the gateway, connecting Malaysia’s investment products to global capital and investors.”

    Executive Moves

    FXPA elects Joe Hoffman as new Chair in its 10th anniversary

    “The opportunity to serve as Chair of the FXPA is truly an honor, and I am committed to upholding the exceptional work of a FXPA. Given the recent market fluctuations due to global tensions, inflationary pressures, shifts in monetary policy, as well as the outcome of the US election and the risk of recession, brings the potential for more FX volatility in 2024. I am dedicated to expanding the FXPA’s membership and I’m excited about collaborating with all members to echo the unified voice of the FX market.”

    Market News

    Eurozone Fights Stagnation Whilst Stock Indices Rally

    European stock markets are defying economic gloom as they continue to soar to all-time highs, showcasing resilience amidst broader economic challenges.

    Web3

    Lisk Partners with Indonesia’s Communications Ministry to Boost Web3 Startup Ecosystem

    Discover the strategic partnership between Lisk and the Indonesian Ministry of Communications and Informatics, aimed at propelling local Web3 startups to new heights through comprehensive support and education.

    Executive Moves

    Admirals appoints founder Alexander Tsikhilov as CEO

    “Striking the right balance between sourcing new talent and developing and harnessing the strength and capabilities of our current workforce, is key to achieving our vision.”

    <