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

Metaverse Gaming NFT

Nas Academy and Invisible College introduce innovative model for Web3 education

Singapore-based online learning platform, Nas Academy is joining forces with Invisible College to teach people everything they need to know about the Web3.

Digital Assets

Top exec at BitMEX pled guilty US Bank Act violations, pays $150K fine

BitMEX’s head of business development, Gregory Dwyer pled guilty to violating the US Bank Secrecy Act (BSA) and allowing customers to use the platform to circumvent the federal anti-money laundering rules.

Retail FX

CySEC slaps €150,000 fine on FXBFI, operator of 101investing brand

The Cyprus Securities and Exchange Commission (CySEC) today announced that it has reached a settlement with FXBFI Broker Financial Invest Ltd, trading as 101investing, ordering the firm to pay €150,000 for violating the Investment Services and Activities and Regulated Markets Law.

Retail FX

X Open Hub expands multi-asset offering with new cryptocurrencies and indices

X Open Hub, a multi-asset liquidity provider, announced today that it has extended its offering with inclusion of 30 new cryptocurrencies and two emerging market indices.

Retail FX

Interactive Brokers now offers 24/7 access to crypto trading

Interactive Brokers Group, Inc. (NASDAQ: IBKR) has widened access to cryptocurrency trading for its clients. Specifically, the discount broker extended trading hours for its cryptocurrency products to be traded 24/7, including on the weekends.

Inside View

Natural Language Generation for Multi-Language Social Media Strategies 

Natural Language Generation (NLG) is a crucial growth area in the digital landscape, with the unique potential to be used across multiple industries.

Market News, Technology

The B2Core Android App is Now Available For Download

The first version of the B2Core Android app is available for download, and it has many beneficial features for users.

Digital Assets

XBO taps custodian Fireblocks ahead of crypto exchange’s launch has integrated with digital asset and crypto technology platform Fireblocks ahead of the crypto exchange’s upcoming launch.

Industry News

Appital raises another £1.7m after integrating with FactSet, FlexTrade, and TS Imagine

“Appital has a proven track record in securing partnerships with major EMS providers, executing brokers and a trading venue to address the lack of efficiency and control over existing bookbuilding and deal distribution processes.”