Bitcoin Fraudsters Arrested After Impersonating Regulators

| Publish date: 09/30/2018

In the latest cryptocurrency news, the Commodity Futures Trading Commission or CFTC recently filed charges against two defendants. The latter individuals are allegedly going to a number of lengths in attempts to steal Bitcoin.

Violations Revealed

The regulator said that it was charging two individuals – known as Morgan Hunt and Kim Hecroft – for “fraudulent solicitation, impersonation of a CFTC investigator and forging CFTC documents” as part of an elaborate scheme to convince digital currency investors to pay a fake tax in Bitcoin to the defendants.

According to a press release, Hunt, who claims to be of Arlington, Texas and may be doing business as Diamonds Trading Investment House, and Hecroft, who claims to be from Baltimore, Maryland and may be doing business as First Options Trading, “engaged in a fraudulent scheme to solicit bitcoin from members of the public.”

Moreover, the two did so “through false or misleading representations or omissions,” one of which is the impersonation a CFTC investigator and forging documents with an official CFTC seal and bearing the CFTC’s general counsel’s name.

The pair has successfully defrauded at least two customers, one of whom was persuaded to send Bitcoin to them.

Misleading Investors

Among the charges, the release notes, is the claim that the defendants forged a document stating that BTC investors needed to pay taxes to the regulator if they wished to withdraw their bitcoin.

CFTC director of enforcement James McDonald said in a statement that “increased public awareness of the CFTC’s involvement in policing the virtual currency markets has, unfortunately, provided new opportunities for bad actors.”

McDonald was quoted saying, “As alleged in the complaint, defendants sought to exploit public trust in the CFTC through forged documents purporting to be official CFTC memoranda requiring the payment of a tax on cryptocurrency accounts. The CFTC does not collect taxes. The CFTC is on guard against fraudsters who try to take advantage of the CFTC’s reputation in order to cheat customers, and will take swift action against such misconduct.”

As of press time, the CFTC is looking for a way to seek restitution for the victims, the disgorgement of any gains and penalties. At the same time, it wants to come up with a permanent trading and registration ban for each defendant, as well as a permanent injunction against any further violations of the Commodity Exchange Act and agency regulations.


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