US Government shutdown pushes CFTC to seek stay of actions against fraudsters

Maria Nikolova

The CFTC is taking steps to effectuate the shutdown, which means the regulator cannot proceed with all actions it has taken against binary options and virtual currency fraudsters.

The US Government shutdown is affecting the services of regulatory bodies, including the Commodity Futures Trading Commission (CFTC), which is seeking stay of actions against binary options and virtual currency fraudsters. The respective motions were filed with federal courts on December 26, 2018.

One example of a case which the CFTC wants stayed targets Blake Kantor, Nathan Mullins, Blue Bit Banc, Blue Bit Analytics, Ltd., G. Thomas Client Services, and Blue Wolf Sales Consultants. The defendants are accused of having solicited potential customers through emails, phone calls, and a website to purchase illegal off-exchange binary options via companies such as Blue Bit Banc. Under the allegations, the defendants sought to cover up their misappropriation by inviting customers to transfer their binary options account balances into a virtual currency known as ATM Coin.

Another example of an enforcement action that the CFTC wants to be stayed as a result of the shutdown targets Jason B. Scharf, doing business as Citrades.com and AutoTradingBinary.com, his companies CIT Investments LLC, a Nevada limited liability corporation; Brevspand EOOD, a Bulgarian business entity; CIT Investments Ltd., a Marshall Islands business entity; CIT Investments Ltd., an Anguillan business entity; and A & J Media Partners, Inc., a California corporation. The case also names their affiliate marketers Zilmil and its owner Michael Shah among the defendants.

The defendants are alleged to have induced people to deposit money with illegal binary options trading websites that claimed to offer customers the ability to trade binary options online. The defendants acted as marketers for the following binary options websites: LBinary, Global Trader 365, Vault Options, TraderXP, Trade Rush, Banc de Binary, Citrades, OptionMint, OptionRally, RBOptions, Bloombex Options, Redwood Options, BeeOptions, Amber Options, OptionsXO, and SpotFN. None of these websites or their operators are or ever have been registered to offer binary options contracts to the public.

In both cases, the CFTC requests that the Court stay the deadlines pending the government shutdown. The regulator explains that it has shut down and all non-essential employees are furloughed and prohibited by law from performing actions related to their employment.

The CFTC is taking steps to prepare for this shutdown to ensure (a) that it complies with all of its obligations before this Court; and (b) that it does not violate the Anti-deficiency Act. Accordingly, the CFTC requests that, in light of the shutdown, the Court stay all deadlines in the above-mentioned matters.

In both cases, the CFTC will seek to lift the stay upon reinstatement of the employment status of the counsel.

Let’s recall that, in January 2018, the CFTC made similar applications with federal courts due to what turned out to be a rather short-lived government shutdown.

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