CFTC Accuses Cash FX Group of $950 Million Ponzi Scheme, Losses Exceeding $406 Million

The U.S. Commodity Futures Trading Commission (CFTC) has filed a lawsuit against Cash FX Group S.A. and its CEO Huascar Jose Lopez Castillo, The Conversion Pros Inc. and its CEOs Ronald Pope and Justin Halladay, accusing them of operating a multi-level marketing Ponzi scheme that raised over $950 million from the public, claiming it was for retail foreign exchange contract trading. The CFTC pointed out that the defendants falsely claimed that funds were traded by professional traders, proprietary algorithms, and AI, promising returns of up to 15% per week; in reality, Cash FX conducted only a small amount of foreign exchange trading, with almost all participants' funds being misappropriated and used to pay fictitious trading profits to other participants from the funds contributed by new participants, while also paying millions of dollars to the defendants. The CFTC also stated that Cash FX provided participants with false account statements to maintain the illusion of high trading returns, resulting in losses of at least $406 million for participants. The CFTC is seeking to order the defendants to pay restitution, forfeit illegal gains, pay civil monetary penalties, and impose trading and registration bans as well as permanent injunctions.