CFTC offers settlement to binary options firm Citrades

Maria Nikolova

The settling defendants will have to disgorge all ill-gotten gains and to comply with a Permanent Injunction.

The United States Commodity Futures Trading Commission (CFTC) on Thursday filed a Proposed Order to settle its claims against some of the defendants in a binary options fraud case at the Florida Middle District Court. The regulator respectfully requests that the Court enter the proposed Consent Order of Permanent Injunction and Other Statutory and Equitable Relief against Defendants Jason B. Scharf (doing business as Citrades.com and Autotradingbinary.com) and A & J Media Partners, Inc.

Let’s recall that the CFTC Complaint charges the defendants with acting as Futures Commission Merchants (FCM) and Commodity Trading Advisors (CTA) without registration, as well as with soliciting more than $16 million in connection with illegal binary options contracts. The Complaint details the fraudulent practices of the above-mentioned binary options firms, including promises of artificially high returns, bonuses and happy life, followed by halt of any communication once money was deposited.

To effect partial settlement of the matters alleged in the Complaint against Jason B. Scharf and A & J Media Partners, Inc. without a trial and on the merits or any further judicial proceedings, the settling Citrades defendants agree to the entry of the Consent Order of Permanent Injunction and Other Statutory and Equitable Relief. The defendants do not admit or deny the allegations in the Complaint.

Under the Proposed Order, the settling defendants are enjoined and prohibited from (inter alia):

  • entering into swaps transactions with retail customers off a registered exchange;
  • conducting activities relating to commodity options off of a registered exchange;
  • acting in a capacity requiring registration without the benefit of registration;
  • using the instrumentalities of interstate commerce to cheat or defraud;
  • conducting activities relating to binary options;
  • acting as an affiliate marketer in a capacity that involves binary options;
  • offering so-called autotrading systems or services that purport to trade binary options or any commodity interest.

The Order also imposes restrictions on defendants’ assets.

The defendants are also ordered to disgorge all ill-gotten funds and to pay a civil monetary penalty, with the size of the latter to be determined by the Court.

As per the second status report filed by the Receiver assigned to the case, since the inception of the Receivership, the Receiver has frozen or recovered a total of $7,945,053.32 in funds held in accounts at multiple financial institutions and in an attorney’s trust account.

The Receiver’s preliminary analysis of the accounts reveals that there were many transfers between the identified bank accounts and frequent transfers between the defendants’ accounts and affiliate networks and marketers through which the defendants operated their businesses, attracted customers, and received their funds. Further, the forensic accountants’ consolidated account reconstructions revealed multiple transfers of substantial funds to relatives and affiliates of the defendants.

The case is captioned Commodity Futures Trading Commission v. Scharf et al (3:17-cv-00774).

Read this next

Retail FX

Banxso announces 8.7% interest rate on deposits in South Africa

“With Banxso, they can enjoy the benefits of both worlds – earning competitive interest and having the freedom to trade, all within the same platform.”

Industry News

FINRA to publish transaction details in U.S. Treasury securities

“Consistent with our longstanding practice, FINRA is introducing greater transparency in a calibrated and careful manner, benefiting liquidity and resilience in this critical market while also mitigating potential information leakage concerns.”

Institutional FX

OpenYield launches “cheap and easy” fixed income trading for brokers

“We’re on a mission to make bonds cheap and easy to trade, and are excited about the opportunity to build generational capital markets infrastructure.”

Digital Assets

Sumsub and Mercuryo publish a guide for VASPs: “Mastering Travel Rule Compliance”

“At Sumsub, we’ve concentrated our efforts on filling the gap in understanding the complexity of Travel Rule regulation and helping organizations find the best solution to stay safe and compliant while minimizing costs and avoiding potential risks of non-compliance. This guide we created with Mercuryo, our trusted partner, is the ultimate navigation tool all VASPs can consult.”

Digital Assets

Bitget Wallet Leads with Record Swap Volume & New Crypto Innovations

This week, Bitget Wallet achieved a milestone by surpassing Metamask with a record 388,757 Swap order transactions, securing the global lead. The significant 7-day trading volume, almost 68,000 more than its rival, underscores its liquidity and user trust. This robust activity signals Bitget Wallet’s prominent role and reliability in the dynamic crypto market.

Digital Assets

Embarking on a Digital Currency Journey

Imagine you’ve stumbled upon a treasure map, leading you to untold riches hidden in the vastness of the internet. Instead of gold coins and jewel-encrusted goblets, this treasure comes in the form of digital currencies, the modern-day loot coveted by many.

Reviews

Traders Union Experts Share The Trading Analyst Review For 2024

Navigating options trading in rapidly shifting markets poses a considerable challenge. This is where options trading alert services become invaluable. They aid traders in keeping abreast of evolving opportunities and market trends. In this assessment, Traders Union experts scrutinize The Trading Analyst alert service to ascertain its efficacy. 

Digital Assets

BlockDAG’s Presale Achieves $9.9M: Aiming For A 5000-Fold ROI As Cardano’s Price Rises And Fantom Launches Sonic

Explore Cardano’s surge, Sonic’s efficiency, and why BlockDAG’s growth makes it the top crypto choice. A deep dive into the future of blockchain investments.

Digital Assets

US, UK probe $20 billion Tether transfers tied to Russian exchange.

U.S. and UK authorities are investigating the movement of $20 billion in the USD-pegged stablecoin tether (USDT) through Moscow-based exchange Garantex.

<