The Commodity Futures Trading Commission (CFTC) has settled charges against Jozef Gherman of Florida and J Squared LLC for making misleading statements or omitting material facts in connection with soliciting more than $300,000 from more than 40 individuals to invest in digital assets. According to a statement by the CFTC, Gherman was an employee and one of the founders of J Squared and was its principal owner and CEO.
The order requires Gherman and J Squared to pay a $150,000 civil monetary penalty, with the amount to be paid by each capped at $75,000, and any post-judgment interest.
The order also requires Gherman and J Squared to pay $247,110 in restitution, with the amount to be paid by each capped at $123,555, and any post-judgment interest. The order also imposes a 10-year ban on Gherman and J Squared from trading on or subject to the rules of any CFTC-registered entity, and from engaging in any activities requiring registration with the CFTC.
“The CFTC will continue to work to protect participants from false and misleading solicitation practices and hold those engaging in such practices, including individuals, accountable,” said Acting Director of Enforcement Vincent McGonagle.
According to the CFTC, from at least June 2017 to June 2018, Gherman and J Squared accepted funds in the form of digital currency and fiat cash to trade virtual currencies, including Bitcoin, Bitcoin Cash, Ether, and other crypto.
The CFTC states that they recklessly made false and misleading statements of material fact or omitted to state material facts which induced individuals to invest with J Squared, invest additional funds with J Squared, or continue to hold their investments with J Squared. Allegedly, they also made misleading statements regarding J Squared’s growth and success as a company. The CFTC reports that customers suffered losses totaling over $247,000.