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CFTC Files Civil Enforcement Action Against Mosaic Exchange for Alleged Crypto Scheme

The US CFTC takes action against Mosaic Exchange, alleging a fraudulent crypto scheme that deceived investors and misappropriated funds. Commissioner calls for stronger crypto industry regulations.

In a significant move targeting the cryptocurrency industry, the US Commodity Futures Trading Commission (CFTC) has initiated a civil enforcement action against Mosaic Exchange Limited and its CEO, Sean Michael. The complaint alleges that the defendants operated a fraudulent digital asset scheme, deceiving investors and misusing customer funds.

The case spans from February 2019 to June 2021, during which the defendants allegedly made false claims about Mosaic Exchange. They promised substantial assets under management, an 82% accurate trading algorithm, and impressive profit margins. However, these representations were reportedly fraudulent, resulting in customer losses.

CFTC Commissioner Kristin N. Johnson highlighted the need to protect investors from crypto fraud, citing Chainalysis data showing significant losses due to scams. Johnson stressed the importance of regulations to safeguard vulnerable investors, especially in rapidly evolving crypto markets.

The CFTC seeks various remedies, including restitution, penalties, and injunctions, in its litigation against Mosaic Exchange.

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