CFTC secures a court order against Rashawn Russell, banning him from trading and ordering over $1.5M in restitution.
CFTC Secures Court Order Against Rashawn Russell
The U.S. Commodity Futures Trading Commission (CFTC) has secured a court order against New York resident Rashawn Russell, who was charged with fraudulent solicitation and misappropriation of investor funds in a digital asset trading scheme. The U.S. District Court for the Eastern District of New York ruled that Russell must pay over $1.5 million in restitution to victims.
Details of the fraudulent scheme
According to the CFTC complaint filed in April 2023, Russell ran a fraudulent digital asset trading fund between November 2020 and August 2022. He allegedly misled investors by claiming he managed a proprietary trading operation, soliciting Bitcoin, Ether, and fiat currency under false pretenses. The court found that Russell intentionally misrepresented the fund’s structure, size, and performance, promising guaranteed returns and assured withdrawals that never materialized.
Misuse of investor funds
Instead of trading as promised, Russell misappropriated over $1.5 million. Court documents reveal that he used investor funds to cover personal expenses, gambling-related activities, and Ponzi-like payments to earlier investors.
Parallel criminal case and sentencing
In a separate criminal case, Russell pleaded guilty in September 2023 to wire fraud related to the scheme, as well as access device fraud in an unrelated case. He was sentenced to more than three years in prison, followed by three years of supervised release, and was ordered to pay full restitution.
Regulatory implications
This case is among the first under acting CFTC Chair Caroline Pham, who recently announced a shift in the agency’s enforcement priorities to focus on fraud. The decision highlights the agency’s ongoing crackdown on fraudulent activities in the digital asset sector.
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