Court allows alleged Bitcoin fraudster to consult Federal Pro Bono Clinic instead of abandoning defense

Maria Nikolova

Instead of accepting Patrick McDonnell’s admission that he gives up his fight with the CFTC, the Court allows him to consult the Federal Pro Bono Clinic.

Chief Magistrate Judge Roanne L. Mann of the New York Eastern District Court has shown some awkward lenience towards alleged Bitcoin fraudster Patrick McDonnell who had himself given up his fight with the Commodity Futures Trading Commission (CFTC).

Just days after stating that he did not wish to answer to the CFTC complaint against him, Patrick McDonnell changed his stance during a telephone conference held before Judge Mann. After discussing his rather desperate letter with the Court, McDonnell asked instead that the deadline for answering the complaint be extended so that he may consult with the Federal Pro Bono Clinic. The Court sided with the defendant and granted his request. There will be no end to the virtual currency fraud case for the time being, as McDonnell’s answer is now due by April 25, 2018.

The case in question is captioned Commodity Futures Trading Commission v. McDonnell et al (1:18-cv-00361) and was launched by the CFTC in January this year. The defendants, including McDonnell and CabbageTech, Corp. doing business as Coin Drop Markets (CDM), were charged with fraud and misappropriation in connection with purchases and trading of Bitcoin and Litecoin.

The CFTC Complaint alleges that from approximately January 2017 to the present, McDonnell and his companies engaged in a deceptive and fraudulent virtual currency scheme to induce customers to send money and virtual currencies to CabbageTech, purportedly in exchange for real-time virtual currency trading advice and for virtual currency purchasing and trading on behalf of the customers under McDonnell’s direction. The customers never saw those funds again. In short, McDonnell and his company used their fraudulent solicitations to obtain and then simply misappropriate customer funds.

The CFTC Complaint further alleges that to conceal their scheme, soon after obtaining customer funds, the defendants removed the website and social media materials from the Internet and ceased communicating with customers. The CFTC Complaint also alleges that none of the defendants has ever been registered with the CFTC in any capacity.

The case has attracted public attention thanks to the landmark decision about the status of cryptocurrencies. The court has sided with the CFTC and ruled that virtual currencies are commodities and, hence, found that this is a market segment which is overseen by the CFTC.

Read this next

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.

Digital Assets

BlockDAG Presale Raises $9.9M as Batch 5 Nears Sell-Out Amid Bonk’s Fluctuating Trading Volume & Spell’s Bullish Price

Explore BONK’s trading volume, SPELL’s market shifts, and why BlockDAG’s 10,000 ROI makes it an ideal crypto for savvy investors in 2024.

Digital Assets

Bybit expands into Europe amid regulatory scrutiny

Dubai-based cryptocurrency exchange Bybit is expanding its operations in Europe after encountering regulatory challenges in Hong Kong.

Digital Assets

Cathie Wood’s sponsored Bitcoin ETF sees historic $200 million inflows

The ARK 21Shares Bitcoin ETF (ARKB), co-sponsored by Cathie Wood’s ARK Invest, registered historic inflows exceeding $200 million on Wednesday, signaling a robust appetite among investors for Bitcoin-centric investments.

Digital Assets

Sam Bankman-Fried might see his 25-year sentence halved

Sam Bankman-Fried, the founder of the failed cryptocurrency exchange FTX, was sentenced to 25 years in federal prison by a Manhattan court on Thursday. This comes after he was convicted of defrauding customers and investors, with Judge Lewis Kaplan highlighting the potential future risks posed by Bankman-Fried.

Technical Analysis

EURJPY Technical Analysis Report 28 March, 2024

EURJPY currency pair under the bearish pressure after the pair reversed down from the major resistance level 164.25, which also stopped the sharp weekly uptrend at the end of last year,

<