The Commodity Futures Trading Commission (CFTC) has filed charges against Rashawn Russell, an individual who allegedly solicited retail investors to invest in a digital asset trading fund. Russell allegedly misappropriated $1 million in investor assets.
The civil enforcement action has been filed in the US District Court for the Eastern District of New York. The CFTC seeks restitution, disgorgement, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against further violations of the Commodity Exchange Act (CEA) and CFTC regulations, as charged.
CFTC Director of Enforcement Ian McGinley said the action is emblematic of the Commission’s unrelenting pursuit of holding bad actors accountable and protecting retail investors.
The CFTC complaint alleges that, from around November 2020 through July 2022, Russell solicited retail investors to contribute Bitcoin, Ether, and fiat currency to invest in his purported proprietary digital assets trading fund. The complaint claims that Russell guaranteed no losses to investors and, in some instances, a minimum 25 percent return on investment.
The complaint adds that at least $1 million in investor assets were allegedly used to pay personal expenses, entities associated with gambling activities, and Ponzi-like payments to current investors, among other things.
Russell was charged with one count of wire fraud in the Eastern District of New York, United States v. Rashawn Russell, Case No. 23-cr-00152 (E.D.N.Y.), for conduct similar to that alleged in the CFTC’s complaint.