For allegedly running a fraudulent digital asset commodity scheme, the Commodity Futures Trading Commission (CFTC) has filed a civil enforcement action in the US District Court for the Southern District of Florida against Pennsylvania-based Mosaic Exchange Limited and its CEO Sean Michael. The CFTC asserts that Mosaic and its operators deceitfully solicited hundreds of thousands of dollars in bitcoin or other funds from at least 17 people in the US and other nations so they could trade BTC and other digital asset commodities on their behalf, but instead misappropriated the funds.
Mosaic is accused of lying about the assets it managed between February 2019 and June 2021, implying that it was a major player in the cryptocurrency trading sector. Additionally, according to the complaint, Mosaic created a proprietary trading algorithm with an 82% accuracy rate that was used to produce significant profits for clients. In order to give their business more credibility, Mosaic and its CEO also misrepresented having partnerships or broker agreements with specific cryptocurrency exchanges.
According to the CFTC, Mosaic was discovered to have lost money when trading for its clients and did not actually have the considerable assets under management that were claimed to be there. Additionally, Mosaic did not regularly deliver the large returns that were promised to investors, and the profit margins were unsupported. Additionally, the complaint claims that the platform lacked the partnerships or broker agreements that were claimed, thereby misleading clients about the site’s reliability. The entire operation, according to CFTC Commissioner Kristin Johnson, was a “sham” and a “virtual house of cards” that caused unwary investors to lose a significant amount of their hard-earned money.