Bitcoin Fraud: CFTC Charges Two Individuals for Swindling Investors

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IIG Managing Partner pleads guilty to Ponzi-like scheme

The U.S. Commodity Futures Trading Commission (CFTC) filed charges against two people and their companies involved in bitcoin fraud.

On Friday, the regulator released two separate statements regarding its civil enforcement actions against Patrick K. McDonnell and his company Cabbage Tech as well as Dillon Michael Dean and his firm The Entrepreneur Headquarters Limited.

According to the CFTC, McDonnell’s Cabbage Tech is also doing business as Coin Drop Markets (CDM). The regulator alleged that McDonnell and his company engaged in a deceptive virtual currency scheme.

Defendants preyed on customers interested in bitcoin

The CFTC charged McDonnell and CDM with “fraud and misappropriation in connection with purchases and trading of bitcoin and litecoin.” The regulator alleged that McDonnell encouraged customers to send money and virtual currencies in exchange for real-time trading advice. He also promised to purchase and trade virtual currencies for his customers.

McDonnell did not provide real-time trading advice to his customer and just disappeared with their funds. According to the CFTC, McDonnell shut down his website, deleted information on social media, and stopped communicating with CDM customers. McDonnell and his company are not registered with the regulator.