The U.S. Commodity Futures Trading Commission (CFTC) has filed a federal lawsuit accusing Cash FX Group and three individuals of running a large foreign-exchange investment scheme tied to crypto, alleging that investors were sold a multilevel-marketing Ponzi structure with promised returns far above anything justified by actual trading activity.

According to the CFTC, the complaint was filed Friday in the U.S. District Court for the Middle District of Florida, seeking to hold accountable Cash FX and its CEO, Huascar Jose Lopez Castillo of Brazil, as well as The Conversion Pros and its CEO, Ronald Pope of Oregon, and Justin Halladay of Florida.

Key takeaways

• The CFTC alleges the defendants collected more than $950 million for a purported retail forex trading “commodity pool.”
• The regulator says the operation used new participant funds to cover promised or fictitious trading profits rather than genuine trading performance.
• Prosecutors claim the defendants misrepresented trading methods, including claims involving expert traders, proprietary algorithms, and artificial intelligence.
• The CFTC estimates participants lost at least $406 million, citing alleged false accounting provided to investors.

CFTC alleges crypto-linked forex “commodity pool” was a Ponzi scheme

In its complaint, the CFTC alleges that Cash FX Group and the three individuals operated a multilevel marketing Ponzi scheme that solicited and accepted over $950 million from participants for purported trading of retail foreign currency contracts through a commodity pool.

Under the CFTC’s allegations, the promotional pitch centered on the idea that investor money would be actively managed by highly sophisticated systems—expert traders, proprietary algorithms, and artificial intelligence—while offering weekly return promises that, according to the agency, could reach up to 15%.

The complaint further contends that the defendants conducted only minimal forex trading, while most of the participant funds were misappropriated. The CFTC says the scheme relied on inflows from new participants to sustain earlier payouts described as trading gains.

Fictitious profits, misappropriation, and alleged false reporting

The CFTC’s allegations describe a mechanism common to Ponzi structures: investors are told their funds are being used to generate profits through trading, but payouts are funded primarily by fresh money coming into the system.

As described by the CFTC, the defendants allegedly redirected millions of dollars to each defendant while using incoming participant contributions to support claims of profit generation. The complaint also alleges the defendants provided participants with false accounting statements.

On losses, the CFTC claims participants lost at least $406 million, based on the agency’s allegations that participants were misled about performance and fund handling.

“The Division of Enforcement has continued to refocus on its core mission of protecting the public from fraud and manipulation,” said Director of Enforcement David I. Miller. “This critical action, and the massive fraud it targets, reflects our steadfast commitment to addressing fraud wherever we find it.”

Why this enforcement matters as the CFTC moves toward wider crypto oversight

This case lands as U.S. regulators continue to refine how they oversee crypto-adjacent markets and marketing practices. While the CFTC lawsuit focuses on an alleged forex investment pool and the handling of investor funds, it also reflects the broader enforcement posture that has repeatedly targeted schemes that borrow the language of sophisticated technology while operating without legitimate risk controls or verifiable trading activity.

Earlier coverage from Cointelegraph noted that the CFTC had submitted a new regulatory action covering crypto asset transactions and markets for White House review on Sept. 18. That step came after the Senate failed to advance the CLARITY Act, which would have aimed to establish a federal regulatory framework for crypto markets.

Although the enforcement action in this case does not hinge on new legislative outcomes, it fits into an environment where the agency is signaling continued attention to fraud, manipulation, and misleading representations—whether the scheme is marketed as trading, algorithmic investing, or “managed” returns tied to financial products.

What to watch next

As the lawsuit proceeds, investors and market participants should watch for how the court addresses the CFTC’s claims about fund handling, the alleged extent of actual forex trading, and whether the defendants can rebut allegations of misappropriation and false accounting. The case also underscores that, even amid regulatory uncertainty, regulators can pursue fraud charges through existing enforcement authorities.

Bitget has set a Sep. 28 restart for Bitcoin withdrawals after a Sep. 24 security incident, with Ether, USDT, and other withdrawal services scheduled to follow through Oct. 2.

Bitget said in an update that its technical team had identified and fixed the vulnerabilities tied to the incident. The exchange is checking its withdrawal systems before reopening them and said Mandiant, a cybersecurity firm owned by Google, and blockchain security company SlowMist are helping investigate the attack.

The dates are part of a planned reopening schedule. Bitget told users to rely on notices from the platform and its official channels for confirmation that each service is available. Customers do not need to take any action before withdrawals resume, it said.

Bitget withdrawals are scheduled to return in four stages

Under the schedule, BTC withdrawals on the Bitcoin network are due to resume at 08:00 UTC on Sep. 28. ETH withdrawals are set for the same time on Sep. 29 across Ethereum, BNB Smart Chain, Arbitrum, Base and Optimism.

USDT withdrawals are scheduled for 08:00 UTC on Sep. 30 across Ethereum, BNB Smart Chain, Solana and Tron. Bitget placed withdrawals for other tokens, fiat currency services and peer-to-peer transactions in the final stage, scheduled for 08:00 UTC on Oct. 2.

The network lists matter for customers holding ETH or USDT: a token’s scheduled return does not mean withdrawals on every network will reopen at once. Bitget named five networks for the first ETH stage and four for USDT. It did not give a network-by-network list for the remaining tokens in the schedule shared with users.

Trading and deposits have continued during the withdrawal pause, according to the exchange. Bitget described the suspension as a temporary security measure and said customer account balances had not changed. Its statement that user assets are unaffected refers to customer balances; the exchange has separately reported unauthorized transfers from its own wallet infrastructure.

The reported loss has risen from Bitget’s first estimate

Bitget detected unauthorized transfers from some of its wallets on Sep. 24 and halted withdrawals while it investigated. As crypto.news reported Friday, the exchange initially estimated that about $351.6 million in assets were affected. It said its cold wallets were secure and that its early investigation had found no evidence of a private-key leak.

In a subsequent account cited by Outlook Money on Sep. 26, Bitget put the value transferred to attacker-controlled addresses at approximately $387.5 million. The later figure included Zcash and TRON assets that were absent from the first estimate. Bitget said its tracing work was continuing, so the figure may change as investigators classify additional transactions.

The earlier investigation pointed to a possible breach of a backend wallet service, according to Bitget’s statements covered by crypto.news. The exchange had not established a final entry point in that account. Its latest statement says the vulnerabilities have been fixed, while Mandiant and SlowMist continue to assist with the investigation.

Bitget has said its protection fund will cover the financial impact of the incident. During the withdrawal pause, the exchange reported that the fund held more than $464 million and said customer balances remained accurate. The fund statement is Bitget’s account of how it intends to absorb the loss; it does not mean the unauthorized transfers did not occur.

Chief Executive Gracy Chen also raised a possible North Korean connection during an earlier public discussion, citing similarities involving IP addresses and VPN services. She did not confirm who carried out the attack. No public attribution by a government agency was identified in the earlier crypto.news investigation report.

Stolen USDC transfers drew attention in the U.S.

While withdrawals were suspended, security researcher Taylor Monahan identified USDC movements she linked to the attacker, including transfers and conversions into ETH. Her findings, reported by crypto.news on Sep. 25, raised questions about whether Circle could block the movement of stolen USDC. The public account did not establish whether Circle had received a legal order concerning the addresses.

The question has a direct U.S. connection because Circle is the U.S.-based issuer of USDC. Circle has said it freezes tokens when legally compelled. In a separate U.S. federal lawsuit filed after the Drift Protocol exploit, a claimant alleged that Circle failed to stop stolen USDC moving through its cross-chain transfer system. The allegation is part of that lawsuit, not a court finding against Circle or a determination about Circle’s response to the Bitget incident.

For Bitget customers, the next operational step remains the Bitcoin withdrawal window scheduled for Sep. 28 at 08:00 UTC. The exchange said it would confirm each reopening through its official notices as the security checks are completed.

The U.S. Commodity Futures Trading Commission (CFTC) has filed a lawsuit seeking to hold Cash FX Group and three individuals accountable for a large-scale foreign-exchange investment scheme that the regulator says involved cryptocurrency.

According to the CFTC, the case centers on allegations that the defendants raised more than $950 million from participants by promoting a purported “commodity pool” meant to trade retail foreign currency contracts, while misrepresenting how investor money was managed and the returns investors were promised.

Key takeaways

• The CFTC says it filed its complaint Friday in the U.S. District Court for the Middle District of Florida.
• Regulators allege a multilevel marketing Ponzi scheme built around forex trading claims, including promised returns “up to 15% weekly.”
• The complaint alleges most participant funds were misappropriated rather than used for legitimate trading.
• The CFTC claims participants suffered losses of at least $406 million, alongside alleged false accounting statements.

A $950 million forex pool scheme, tied to crypto investors

In its press release, the CFTC states that the lawsuit targets Cash FX Group and three individuals: Huascar Jose Lopez Castillo of Brazil, The Conversion Pros and its CEO Ronald Pope of Oregon, and Justin Halladay of Florida. The regulator’s complaint, it says, was filed Friday in the U.S. District Court for the Middle District of Florida.

The agency’s core allegation is that the defendants operated a multilevel marketing Ponzi scheme. The CFTC claims the group solicited and accepted more than $950 million from participants based on the pitch that the funds would be used to trade retail foreign currency contracts through a commodity pool.

While the complaint is framed around forex investment activity in a commodity pool structure, the CFTC also characterizes the scheme as involving cryptocurrency. That matters for investors because it underscores the regulator’s position that crypto-adjacent marketing and fundraising can fall under commodities enforcement when it’s tied to fraud and manipulation, even if the underlying product is presented as traditional finance trading.

Alleged return promises and claims about “expert trading” technology

The CFTC alleges that the defendants made a series of claims designed to build trust and justify the pooling of funds. Among the allegations: the defendants falsely stated that investor money would be handled by expert traders, “proprietary algorithms,” and artificial intelligence.

The regulator also says participants were promised returns as high as 15% weekly. If the allegations are proven, that kind of high-frequency, fixed-feel return promise is often a central feature of fraud cases—particularly when the promised performance is inconsistent with transparent trading records and instead relies on marketing narratives.

According to the CFTC, despite the messaging around sophisticated trading, forex trading was minimal. The complaint further alleges that the defendants misappropriated most of the participant funds, using new contributions from investors to support fictitious profits.

How the CFTC says investor money was handled

In laying out its allegations, the CFTC contends that most of the participant funds were diverted away from meaningful trading activity. The complaint describes a pattern where “new contributions from participants” were used to pay alleged trading profits that the CFTC characterizes as fictitious.

The agency also claims the defendants directed millions of dollars to each defendant. This allocation detail is important for readers because, in many Ponzi-style cases, the flow of funds to operators and related parties is used to support the fraud narrative—showing that investor money can be repackaged as returns while principal is drained.

Separately, the CFTC alleges that the defendants provided false accounting statements to participants. The CFTC says those investors lost at least $406 million. Taken together, the return claims, alleged minimal trading, alleged diversion of funds, and alleged false accounting statements form a consistent enforcement theory: investors were sold a trading outcome while money was primarily used to sustain the scheme and enrich the defendants.

“The Division of Enforcement has continued to refocus on its core mission of protecting the public from fraud and manipulation,” said Director of Enforcement David I. Miller. “This critical action, and the massive fraud it targets, reflects our steadfast commitment to addressing fraud wherever we find it.”

Broader enforcement and regulation: crypto oversight in focus

This lawsuit lands as the CFTC continues pushing its regulatory approach to digital asset markets. Cointelegraph previously reported that the CFTC submitted a new regulatory action covering crypto asset transactions and markets for White House review, following the agency’s effort to advance how it oversees parts of the digital asset sector.

That submission, Cointelegraph noted earlier, came days after the U.S. Senate failed to advance the CLARITY Act—legislation intended to establish a federal framework for crypto markets. While the CLARITY Act’s status remains uncertain, the CFTC’s enforcement posture appears clear: regulators are willing to pursue cases where the conduct involves fraud or manipulation, including where cryptocurrency-related fundraising or representations are part of the scheme.

For market participants, the practical takeaway is that “what’s being traded” doesn’t always determine regulatory interest. The CFTC’s complaint, as described in its release, focuses on the structure of solicitation, promised returns, control of funds, and the veracity of trading and accounting representations—elements that can apply regardless of whether the marketing campaign uses crypto terminology.

As the litigation proceeds, investors and users should watch for how the case develops in court—particularly any evidence related to (1) the extent of actual trading activity, (2) the handling and tracing of participant funds, and (3) the accounting records provided to participants. The CFTC’s allegations, if substantiated, would reinforce the message that high-return promises and opaque trading claims—especially those supported by false technology narratives—remain prime targets for enforcement.

The Commodity Futures Trading Commission said it is suing Cash FX Group and three individuals in a $950 million foreign-exchange investment case involving cryptocurrency.

The defendants are Cash FX and its CEO Huascar Jose Lopez Castillo of Brazil, The Conversion Pros and its CEO Ronald Pope of Oregon, and Justin Halladay of Florida.

The CFTC said its complaint was filed Friday in the US District Court for the Middle District of Florida. It alleges the defendants operated a multilevel marketing Ponzi scheme, soliciting and accepting over $950 million for the purported purpose of trading retail foreign currency contracts in a commodity pool. 

The agency alleged the defendants falsely claimed pool funds were handled by expert traders, proprietary algorithms and artificial intelligence, and promised up to 15% weekly returns.

The CFTC alleged that Cash FX engaged in minimal forex trading and misappropriated most of the participant funds, using new contributions from participants to pay fictitious trading profits while directing millions of dollars to each defendant.

Related: Bernstein expects ‘aggressive’ rulemaking from SEC, CFTC, following CLARITY Act failure

Cash FX also provided false accounting statements to participants, who lost at least $406 million, the CFTC alleged. 

“The Division of Enforcement has continued to refocus on its core mission of protecting the public from fraud and manipulation,” said Director of Enforcement David I. Miller. “This critical action, and the massive fraud it targets, reflects our steadfast commitment to addressing fraud wherever we find it.”

Cointelegraph reported Sept. 18 that the CFTC had submitted a new regulatory action covering crypto asset transactions and markets for White House review, as the agency moves forward with its approach to overseeing the digital asset sector.

While details of the planned regulations were not disclosed, the submission came days after the Senate failed to advance the CLARITY Act, legislation aimed at establishing a federal regulatory framework for crypto markets.

Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently.

In this week’s edition of the weekly recap, Bitcoin reached an eight-month high above $87,000 before pulling back, the Federal Reserve proposed rules for U.S. stablecoin issuers, and Bitget suspended withdrawals after a $351.6 million wallet breach. The developments led to a week that also brought a major USDC agreement, new uses for bank-issued stablecoins, and a New York lawsuit against Polymarket.

Bitcoin reaches $87,000 as ETF buying returns

• Bitcoin climbed past $87,000 after clearing resistance near $82,000. HashKey Group researcher Tim Sun linked the move to easing oil and Treasury yields, short covering, and stronger U.S. spot ETF demand. He said the ETF inflows followed the initial breakout rather than starting it.
• U.S. spot Bitcoin ETFs then took in about $999 million on Sep. 21 and $714.7 million on Sep. 22. Bitcoin later retreated toward $84,000 despite continued inflows. According to crypto.news market coverage, futures traders added more than $2 billion in positions during the advance, raising the amount of leverage behind the rally.

Fed proposes stablecoin reserve and bank approval rules

• The Federal Reserve released two proposed GENIUS Act rules on Sep. 24. One would require payment stablecoins issued by firms under its supervision to be fully backed by permitted assets, including short-term U.S. Treasury bills and other highly liquid holdings. It would also set capital and risk-control requirements.
• The second proposal sets out how an insured state member bank would seek Fed approval for a stablecoin-issuing subsidiary. Both drafts remain open to change. A 60-day public comment period will begin after their publication in the Federal Register.

Bitget suspends withdrawals after $351.6 million breach

• Bitget reported unauthorized wallet transfers on Sep. 24 affecting an estimated $351.6 million in assets. The exchange suspended withdrawals while allowing deposits and trading to continue during its investigation and system repairs.
• Bitget said its preliminary findings pointed to a breach of backend systems rather than a private-key leak. Blockchain tracker Lookonchain estimated that 102.93 million XRP, worth about $157.48 million, made up the largest portion of the stolen assets. The exchange had not confirmed who carried out the attack.

Binance buys $100 million Circle stake in USDC deal

• Binance purchased about $100 million in Circle shares through a private placement completed on Sep. 17 and reported this week. The purchase covered approximately 1.24 million shares.
• Under a new five-year agreement, Binance will promote USDC across its platform, while Circle will pay monthly incentives tied to qualifying USDC balances. The agreement replaces earlier arrangements between the companies. Binance is restricted from selling, transferring, or hedging the shares for up to two years, though it retains voting rights.

SoFi puts SoFiUSD into Mastercard card settlement

• SoFi and Mastercard said on Sep. 22 that transactions in SoFi Bank’s $25 billion card program are now settling using SoFiUSD. The bank-issued stablecoin operates within Mastercard’s payment network, while merchants can receive funds without holding the token themselves.
• The companies are also examining SoFiUSD for merchant settlement, cross-border payments, and remittances. The announcement marks a live use of a U.S. bank-issued stablecoin in card infrastructure, rather than a proposed payment trial.

New York sues Polymarket over alleged illegal gambling

• New York Attorney General Letitia James sued Polymarket on Sep. 24, alleging that it offered event contracts to state residents without a gambling license and allowed people under 21 to use the platform. The state is seeking an end to the alleged unlicensed activity, restitution, fines, and forfeiture of gains it says were earned illegally.
• The case adds to New York’s actions involving Kalshi, Coinbase Financial Markets, and Gemini Titan. It came a day after all 11 Democrats on the Senate Banking Committee called for a public hearing on prediction markets.

Strategy resumes Bitcoin purchases with 950 BTC

• Strategy bought 950 BTC for $75.7 million between Sep. 14 and Sep. 20, ending a two-week pause. Its Sep. 21 SEC filing put its total holdings at 846,000 BTC, purchased for about $63.8 billion.
• During the same period, the company spent about $174 million repurchasing STRC preferred shares. It reported no sales under its at-the-market share programs for the week, while its deployable U.S. dollar cash balance fell to about $1.05 billion.

ARK Invest tokenizes venture fund interests

• ARK Invest and Securitize announced tokenized interests in the ARK Venture Fund, beginning on Ethereum. Eligible investors can hold a blockchain-based interest in the fund, whose portfolio includes OpenAI, Anthropic, Stripe, and Databricks.
• The tokens represent fund interests rather than direct ownership of those portfolio companies. A Sep. 21 SEC order permits ARK to offer the tokenized share class under specified conditions, making the regulatory terms part of the U.S. rollout.

Canada’s six largest banks test tokenized deposits

• Canada’s Big Six banks formed a joint project to explore transfers of tokenized Canadian-dollar deposits. Bank of Montreal, CIBC, National Bank of Canada, RBC, Scotiabank, and TD are participating.
• The first phase will focus on transfers between regulated institutions. The proposed tokens would remain liabilities of the issuing banks, which distinguishes them from separately issued stablecoins backed by reserve assets. The banks have described wider payment uses as a later possibility rather than a live service.

ECB asks EU to change MiCA stablecoin reserve floors

• The European Central Bank and the EU’s national central banks asked for changes to MiCA’s stablecoin reserve rules. Current rules require issuers to keep at least 30% of reserves in commercial bank deposits, rising to 60% for stablecoins classed as significant.
• The central banks proposed liquidity requirements based on asset maturity instead. They warned that heavy redemptions from a large stablecoin could put pressure on banks holding its deposits. Their request is a recommendation; it has not changed MiCA’s existing requirements.

KelpDAO and LayerZero dispute responsibility for $292 million exploit

• KelpDAO sued LayerZero and co-founder Bryan Pellegrino in British Columbia over an April attack that drained approximately 116,500 rsETH, valued at $292 million. KelpDAO alleges that LayerZero failed to disclose risks and secure infrastructure used in the transfer.
• LayerZero disputes the claim. It says KelpDAO’s verifier setup created the single point of failure that allowed forged cross-chain messages. Pellegrino called the lawsuit meritless and said he would defend the case.

Cosmos Hub secures 1.23 million ATOM after Neutron attack

• Cosmos Hub validators moved 1,227,121 ATOM linked to a Neutron governance attack into a recovery wallet after halting the network for about 24.5 hours. Roughly 1.73 million stolen ATOM had reached Cosmos Hub from Neutron.
• The recovery wallet requires four of six signers to approve a transfer. A Cosmos Hub governance vote is required before the secured tokens can be returned. Another 168,990.9 ATOM reached the attacker after the restart and was moved to Osmosis and sold.

Alpenglow changes how validators, the computers that check transactions, agree on the network’s records. They will exchange votes directly instead of recording those votes as transactions inside blocks, the batches of transactions added to the blockchain. Agreement can then take one or two voting rounds.

Removing those votes will also make some Solana activity charts fall. Transaction totals that include validator votes will shrink even if users make just as many payments and trades. The Foundation has told data providers to adjust their comparisons.

Services that build transaction histories also need to keep competing candidate blocks separate until the network selects one. Mixing their contents could produce an incorrect record.

Applications that simply send transactions and read account balances require no migration, according to the Foundation’s guide.

The speed figure remains a target derived from simulations, rather than a demonstrated result under live-market conditions. Wallet processing and exchanges’ own deposit checks can add further waiting time.

No firm launch date has been announced for the live network. Anza’s software schedule tentatively allows feature activations to resume Sept. 28, but does not identify that date as Alpenglow’s launch.

A new bottom line?