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Daily fraud update: 6th November

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Denari Capital hit by CFTC charges

A pooled foreign exchange investment firm has been told it will face charges over claims that it fraudulently acquired investments from almost 30 people.

US-based Denari Capital and the two men behind it, Travis Capson and Arnab Sarkar, have been told by the Commodity Futures Trading Commission (CFTC) that it will be taken to court over claims that $8.3m was raised fraudulently.

According to a statement from the regulator, Denari operated the alleged scam from 2012 onwards until as recently as the present day.

It is alleged that those behind Denari co-mingled funds, which means that they placed them in more than one investment pool and mixed together where they ended up invested.

The funds were included in real estate investments, securities – and even spending for the defendants behind the firm.

In a statement, the CFTC outlined other alleged breaches committed by the men, including misrepresentations about how much the firm had previously earned.

“Capson and Sarkar fraudulently solicited participants and prospective participants by willfully or recklessly making material misrepresentations concerning the past profitability of Denari’s forex trading and the profits its participants were making”, the CFTC alleged.

“The defendants also allegedly issued false account statements to participants that misrepresented the profitability of their respective interests in the pool. According to the complaint, the defendants were required to register with the CFTC, but Denari and Capson did not register until May 1, 2019, and Sarkar never registered.

“By the end of July 2019, Denari allegedly owed its participants more than $5.2 million, which it does not have sufficient funds or assets to satisfy”, it added.

If the pair are convicted, they may face a number of possible punishments.

These are believed to include disgorgement of ill-gotten gains, restitution for victims and bans on registering or trading as commodities professionals.

ATM Coin principals hit with multi-million dollar fine

The founders of a firm called ATM Coin have been told that they will need to pay over $4m in a crypto fraud case.

Blake Harrison Kantor and Nathan Mullins have been told that they will need to pay the fine, which amounts to $4.25m, in relation to their binary options scheme.

Binary options trading, which is largely discredited, must be registered with the Commodity Futures Trading Commission (CFTC).

However, those behind ATM Coin failed to do so with their business.

Kantor and Mullins have been involved in a number of brands in the trading field, most of which have hit the headlines in recent months for alleged fraud.

They include Blue Bit Banc, Blue Bit Analytics and others.

In a statement, US Attorney Richard Donoghue noted how technology was part of the alleged scam.

“As alleged, Kantor used a computer program to generate manipulated data to cheat hundreds of investors out of their hard-earned savings”, he said.

“To cover-up his fraudulent scheme, Kantor then lied to the FBI and ordered the alteration of documents that would assist agents in identifying his victims”, he added.