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The US Commodity Futures Trading Commission (CFTC) filed a lawsuit in Arizona District Court against the Debiex platform, accusing it of misappropriating $2.3 million worth of crypto assets.
According to government officials, since March 2022, the creators of Debiex, together with hired managers, have been contacting American clients from at least five states. Platform employees offered people investments in Bitcoin and Ethereum, as well as trading in cryptocurrency derivatives. The CFTC states that Debiex employees were divided into three types.
The first were “agents” who contacted potential clients on social networks, convincing them to open and fund trading accounts with Debiex, promising huge profits from trading cryptocurrencies.
The second was “technical support,” which helped clients create and maintain trading accounts on their behalf.
And still others, the so-called “money mules,” provided their cryptocurrency addresses to Debiex to accept client funds. Lead defendant Zhāng Chéng Yáng fell into this category.
The Debiex websites imitated trading accounts of a real trading platform, although the platform did not actually trade cryptocurrencies, the Commission said. Receiving funds from investors, Debiex management appropriated them for themselves, and screenshots with fictitious information were sent to defrauded clients, the lawsuit says.
The CFTC is seeking to have the court impose an administrative fine on the defendant and prohibit Debiex from engaging in trading activities and oblige it to return funds to investors. The department hopes that other legal remedies will be taken against the platform as the court deems appropriate.
In November, the CFTC threatened to prosecute all cryptocurrency exchanges that attempt to circumvent Know Your Customer (KYC) procedures, even if they are not located in the United States.
According to government officials, since March 2022, the creators of Debiex, together with hired managers, have been contacting American clients from at least five states. Platform employees offered people investments in Bitcoin and Ethereum, as well as trading in cryptocurrency derivatives. The CFTC states that Debiex employees were divided into three types.
The first were “agents” who contacted potential clients on social networks, convincing them to open and fund trading accounts with Debiex, promising huge profits from trading cryptocurrencies.
The second was “technical support,” which helped clients create and maintain trading accounts on their behalf.
And still others, the so-called “money mules,” provided their cryptocurrency addresses to Debiex to accept client funds. Lead defendant Zhāng Chéng Yáng fell into this category.
The Debiex websites imitated trading accounts of a real trading platform, although the platform did not actually trade cryptocurrencies, the Commission said. Receiving funds from investors, Debiex management appropriated them for themselves, and screenshots with fictitious information were sent to defrauded clients, the lawsuit says.
The CFTC is seeking to have the court impose an administrative fine on the defendant and prohibit Debiex from engaging in trading activities and oblige it to return funds to investors. The department hopes that other legal remedies will be taken against the platform as the court deems appropriate.
In November, the CFTC threatened to prosecute all cryptocurrency exchanges that attempt to circumvent Know Your Customer (KYC) procedures, even if they are not located in the United States.
