In a significant move targeting the crypto industry, the US Commodity Futures Trading Commission (CFTC) has filed a civil enforcement action against Mosaic Exchange Limited, a Pennsylvania limited liability company, and its owner and Chief Executive Officer, Sean Michael.

The complaint alleges that the defendants operated a fraudulent digital asset commodity scheme, deceiving investors and misappropriating customer funds.

Alleged Fraudulent Crypto Scheme

According to the complaint, the defendants fraudulently solicited and induced 17 individuals from the United States and other countries to invest hundreds of thousands of dollars’ worth of Bitcoin (BTC) and other funds. 

These funds were supposed to be traded on behalf of the customers in Bitcoin and other crypto assets. However, the defendants allegedly misappropriated the customer’s funds for their benefit.

The case background reveals that from approximately February 2019 to June 2021, the defendants made false representations about Mosaic Exchange. They claimed that Mosaic was a cryptocurrency trading platform with substantial assets under management, offering a proprietary trading algorithm that boasted an 82% accuracy rate. 

Additionally, they advertised significant profit margins ranging from “20% to 60% per month” and “10% to 50+ per month.” The defendants also purported partnerships or broker agreements with specific cryptocurrency trading exchanges.

However, as alleged in the complaint, these representations were fraudulent. Mosaic Exchange did not possess the claimed assets under management or have a track record of profitable trading as advertised.

According to the CFTC, Mosaic incurred losses when trading on behalf of customers. Furthermore, the company did not have the partner

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Author: Ronaldo Marquez

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