The US Commodity Futures Trading Commission (CFTC) recently made a significant announcement regarding a fraudulent project involving precious metals and digital assets. This fraudulent operation, run by four individuals and their unincorporated entity called Fundsz, managed to attract over 14,000 customers at its peak. However, the CFTC alleges that Fundsz never actually engaged in any trading activities, making all client gains “illusory.”
The CFTC filed a complaint in the US District Court for the Middle District of Florida against Rene Larralde, Brian Early, Alisha Ann Kingrey, and Juan Pablo Valcarce, accusing them of fraudulent solicitation from clients under the guise of trading cryptocurrencies and precious metals. Fundsz claimed to use a “proprietary algorithm” and a secret trading method referred to as the “secret sauce.”
The founders boasted about their historical performance, claiming to have provided “on-time and accurate payments” for seven years. They also promised investors extraordinary returns of over 3% per week. Fundsz suggested that a one-time investment of $2,500 could miraculously turn into $1 million within 48 months, without any additional contributions.
To further enhance their credibility and manipulate their victims, the defendants insisted that they had created a parallel charity organization. They alleged that a portion of the contributions made to Fundsz went towards supporting various initiatives, such as cleaning oceans and promoting health, education, and humanitarianism.
Despite the apparent success of Fundsz and their claims of exceptional returns, the CFTC investigation reveals a disturbing truth. The charged individuals and their unincorporated entity never actually conducted any trading activities. Instead, they fabricated fictional weekly returns to deceive their clients, maintaining the illusion of profitability.
A Warning to Potential Victims
Director of Enforcement Ian McGinley emphasized the CFTC’s determination to protect customers in the cryptocurrency and precious metals markets. He highlighted the importance of skepticism when faced with seemingly too good to be true opportunities, and urged individuals to exercise caution and thoroughly research any investment venture before committing their hard-earned money.
As the legal proceedings against the four individuals and Fundsz commence, the case will shed light on the prevalence of fraudulent schemes within the cryptocurrency and precious metals industries. This incident serves as a stark reminder that investors must remain vigilant and exercise due diligence when exploring investment opportunities, particularly in emerging markets with fewer regulations.
The rise and fall of Fundsz highlight the devastating consequences of fraudulent trading practices. It urges investors to be critical and cautious, questioning the legitimacy of any venture that promises extraordinary returns without a clear and transparent trading strategy. The CFTC’s relentless pursuit of fraudsters within these markets reinforces the need for regulatory measures and investor education to safeguard against such scams.