The US Commodity Futures Trading Commission has filed civil cases against virtual currency operators CabbageTech, Entrepreneurs Headquarters Ltd., and My Big Coin Pay Inc. The regulator is alleging fraud, misappropriation, misrepresentation, and other allegations. Its wants disgorgement, fines, restitution, injunctions, and other remedies.
In the case against CabbageTech, doing business as Coin Drop Markets, and its owner Patrick K. McDonnell, the Defendants are accused of participating in a virtual currency scam to solicit investor for funds and virtual money, supposedly in exchange for real time trading advice and the sale and trading of virtual currency under McDonnell’s guidance. Instead, claims the CFTC, investors received no such advice and they never saw their money again because McDonnell and CabbageTech misappropriated their funds. The regulator believes that the defendants sought to hide their scam by eliminating their online and social media presencse and ending communications with customers.
The CFTC’s civil action against McDonnell and his company was announced the same day as its case against The Entrepreneurs Headquarters Limited, which is a company registered in the UK, and founder Dillon Michael Dean. The regulator believes that beginning in April 2017 through now, the defendants solicited at least $1.1M of Bitcoin from over 600 investors, with the promise that the Bitcoin would be turned into fiat currency and invested in a pooled investment vehicle to trade commodity interests.