CFTC charges the founder of Mosaic Exchange with running fraudulent cryptocurrency operations.

The CFTC charges the founder of Mosaic Exchange with running fraudulent cryptocurrency operations.A civil enforcement action against Mosaic Exchange Limited, a cryptocurrency trading platform, and its proprietor, Sean Michael, has been announced by the US Commodity Futures Trading Commission (CFTC).The CFTC revealed that the Pennsylvania-based limited liability company and its founder ran a fictitious digital asset commodity scheme in a press release dated September 27.Before their actions caught the agency's attention, this took place between February 2019 and June 2021.The US agency claimed that the cryptocurrency exchange promoted itself as a legitimate Bitcoin trading business with tens of millions of dollars in assets under management (AUM).In order to trade the cryptocurrency market on their behalf, it deceptively obtained hundreds of thousands of dollars' worth of Bitcoin and other funds from 17 US residents and other nationals.Contrary to what it claimed, the money was actually misappropriated.The fraudulent cryptocurrency operation, according to the CFTC, was successful in seducing its victims with claims that it used a proprietary trading algorithm that was operated in-house, among other things. This would allegedly result in returns that would range from 20% to 60% each month.That's not all, though. Mosaic Exchange Limited took things a step further by claiming broker deals and alliances with well-known, unnamed Bitcoin exchange titans.After conducting an investigation, the CFTC discovered that the cryptocurrency operation was not legitimate and never had the millions of dollars in AUM it claimed.The government body also disclosed that the crypto exchange operated independently and lacked any legitimate broker agreements with other crypto entities.The cryptocurrency market is rife with investment scams.Kristin N. Johnson, the CFTC's commissioner, made a different statement. The entire Mosaic Exchange incident, according to Johnson, was a virtual house of cards.".Johnson claims that as more investment frauds are committed in the developing sector, the need for better investor protection is becoming more and more clear.Given the numerous investment frauds that have hit the cryptocurrency market this year, the Commissioner's observation is well-founded.Investment scams continue to be the most common tactic used by fraudsters, according to a Chainalysis report.According to the report, this year has seen a notable 77 percent decrease in these scams.The exit of VidiLook and Chia Tai Tianqing Pharmaceutical Financial Management, two well-known investment fraud operations, may be partly to blame for this decline in activity among investors and their increased awareness of investment fraud.But ransomware is still a persistent threat, so the industry is not yet safe.In comparison to the same period in 2022, the crypto crime segment has already locked in $175.8 million more. This suggests that thieves are purchasing sophisticated software to steal money from cryptocurrency wallets of investors.The US Department of the Treasury is stepping up its efforts to combat this subset of cryptocurrency crime.Three over-the-counter (OTC) cryptocurrency traders were recently subject to sanctions as a result of their significant support for the infamous North Korean Lazarus Group.These defendants allegedly assisted the cybercriminal organization in converting cryptocurrency worth millions of dollars into fiat money.