On Thursday, July 6, two men from Florida, the United States, were charged with running a Bitcoin scheme worth millions of dollars. They have since settled with the Commodity Futures Trading Commission (CFTC) by agreeing to pay a little over $5 million in restitution.
The U.S. derivatives market regulator charged Levine and Reichenthal with engaging in digital asset fraud, deceiving investors, and swindling over $5 million intended to purchase bitcoin in 2018.
As part of the settlement, the CFTC has required the two individuals to pay about $5.4 million in restitution. Furthermore, they have been prohibited from trading or registering with the CFTC.
The CFTC found that Reichenthal tricked investors by making false promises to obtain millions of dollars worth of bitcoin from Levine. He pretended to be a licensed attorney and escrow agent and held onto the funds from the investors while claiming that the transaction would happen once conditions were met.
However, the investors eventually learned their goal of acquiring Bitcoin was impossible. They were unaware that Levine and Reichenthal had planned to deceive them.
CFTC Commissioner Kristin N. Johnson took the opportunity to emphasize the prevalence of fraud in the digital asset and cryptocurrency domain.
She urged investors to stay cautious and informed to protect themselves from similar scams.
The charges filed by the CFTC against Levine and Reichenthal followed separate criminal actions taken against them, resulting in legal repercussions. Levine was sentenced to nearly six years in prison.
Reichenthal was given credit for time served, indicating that the period spent in custody leading up to his sentencing was deemed sufficient.
As regulatory bodies continue to address fraudulent activities surrounding cryptocurrencies, investors are advised to exercise caution and conduct thorough research before committing their funds to any investment opportunity.