CFTC Files Fraud Charge Against ‘Blockchain’ Entity That Claims To Grow Customer Funds

The Commodity Futures Trading Commission has filed a complaint in the US District Court for the Middle District of Florida against four individuals and their unincorporated entity, Fundsz. This complaint accuses them of fraudulent solicitation from customers to supposedly trade in cryptocurrencies and precious metals.

According to its website, Fundsz claims to be a decentralized platform that utilizes “revolutionary” blockchain technology that empowers individuals, charities, and institutions to raise recurring and sustainable income.

Fundsz Makes Up Fictional Weekly Returns For Clients, CFTC Says

In a press release published on August 11, 2023, the CFTC announced that it has charged Rene Larralde of Melbourne, Florida; Juan Pablo Valcarce of West Melbourne, Florida; Brian Early of New Orleans, Louisiana; and Alisha Ann Kingrey of Franklin, Arkansas (operators of Fundsz) for crypto and precious metals fraud.

The CFTC alleged that the defendants – through Fundsz – have been soliciting participants since October 2020 with claims that it has historically generated more than 3% returns per week with a “proprietary algorithm” for trading crypto and precious metals among other things they called their “secret sauce”.

According to the CFTC complaint, they also allegedly claimed to have made timely and accurate payments for seven years. In an effort to convince clients, the defendants asserted that a single $2,500 contribution can be expected to “grow” into $1 million within 48 months, the CFTC said.

The CFTC claims that the solicitation was “successful”, as the defendants reportedly have over 14,000 clients.

However, the commission found that Fundsz does not trade the received funds, contrary to what customers are led to believe. The defendants allegedly make up and report fictional weekly returns to their clients.

The defendants were also accused of deliberately misrepresenting Fundsz to have a charitable purpose, with the tagline “Fundsz For Your Cause”. This was said to have falsely suggested that contributing to their “unincorporated entity” is a way of providing humanitarian support.