The CFTC is asserting that the Defendants marketed interests in a pooled fund to investors by claiming that a computer program known as “Jigsaw” would trade bitcoin for the fund using a high-frequency, algorithmic trading strategy; but in fact, no such program existed.4 The Defendants created an account for Jigsaw at a digital currency exchange, but they controlled its trading, which was minimal. Notably, the Defendants used Internet chatrooms and social media websites, including Facebook and Instagram, to solicit customers by touting the success of their Jigsaw software. The CFTC claims they also developed a fake “interactive customer dashboard” with falsified balances, deposits and withdrawals.
According to the Complaint, the Defendants used falsified performance reports and promises of significant payouts to solicit more than $600,000 from customers for a pooled fund. Then the CFTC says the Defendants misappropriated nearly all of the customer funds. The CFTC claims the Defendants attempted to conceal the scheme by, among other things, staging a cyber-attack and asserting that it wiped the funds out.