CFTC Sues Cash FX Group Over Alleged $950M Crypto Forex Ponzi Scheme

The US Commodity Futures Trading Commission (CFTC) has filed a lawsuit against Cash FX Group and three individuals, alleging they operated a $950 million multilevel marketing Ponzi scheme that solicited funds for foreign-exchange trading tied to cryptocurrency. The complaint, filed Friday in the US District Court for the Middle District of Florida, names Cash FX and its CEO Huascar Jose Lopez Castillo of Brazil, The Conversion Pros and its CEO Ronald Pope of Oregon, and Justin Halladay of Florida as defendants.

The CFTC alleges the defendants falsely promised participants returns of up to 15% per week, claiming their funds were managed by expert traders, proprietary algorithms, and artificial intelligence systems. In reality, the agency says Cash FX engaged in minimal forex trading and misappropriated most of the capital, using new participant contributions to pay fictitious trading profits while funneling millions of dollars to each defendant. Participants collectively lost at least $406 million, according to the complaint, and were provided with false accounting statements to conceal the fraud.

"This critical action, and the massive fraud it targets, reflects our steadfast commitment to addressing fraud wherever we find it," said Division of Enforcement Director David I. Miller. The lawsuit comes as the CFTC continues to expand its oversight of the digital asset sector. Earlier this month, the agency submitted a new regulatory action covering crypto asset transactions and markets for White House review, days after the Senate failed to advance the CLARITY Act, a bill that would have established a federal regulatory framework for crypto markets.