Recently, the US Commodities Future Trading Commission (CFTC) incriminated a particular organization conning people to rob their digital wallets. The CFTC provided aid to the court in order to prosecute Cabbage Tech. The New York Eastern District Court ruled in the favor of CFTC and charged Cabbage Tech with a hefty fine, which amounted to a whopping $1.1 million. The financial regulatory agency has also been granted jurisdiction over cryptocurrencies as an added bonus to its victory.
Allegedly, the crime for which Cabbage tech was being prosecuted for was conducted during the first six months of last year. Mr. McDonnell who was listed as Chief Technology Officer made bogus claims about being an expert in the field of cryptocurrencies and was advising the potential investors about purchasing and trading crypto. He deceived the clients by telling them of his other offices located in Wall Street. In addition to that, he also cooked up information about the company’s infrastructure. However, it was revealed through investigations that this whole operation was being led by a single man, Patrick McDonnell.
The investors who had been acting on the expert advice they obtained from the company were left unguided as the operation of the company shut down after six months. The company made claims that their website had been hacked and they would be discontinuing their services immediately. The chatrooms, its social media accounts and website became inactive shortly after.
Earlier this year the CFTC filed a case against Patrick McDonnell, who they claimed had cooked up “a deceptive and fraudulent virtual currency scheme for purported virtual currency trading advice; for virtual currency purchases and trading misappropriated [investor] funds “
Patrick McDonnell had previously denied the allegations made by CFTC, because they did not have the authority to regulate his business or any other one concerning cryptocurrencies. Previously, only Securities and Exchange Commission (SEC) was the sole agency that had regulatory authority, but these arguments were rejected by the US district Judge Jack B. Weinstein in Brooklyn New York. As of August 23, 2018, CFTC has been added to the list of agencies that could regulate crypto. One could say that they CFTC hit two birds with one stone.
A non-jury trial was held in July that implicated McDonnell of robbing people from various countries by his illegitimate business. McDonnell who claimed that he could not afford legal help acted as his own lawyer, even though he could seek free legal counsel. He became bankrupt and the potential chances of his employment became increasingly trivial due to his name catching heat on media outlets. He stopped appearing to court during the trial and the court ruled against Cabbage Tech Corp. The Judge ordered McDonnell to pay $290,429 in restitution and $871,287 in penalties.
The CTFC announced its victory on Twitter,
— CFTC (@CFTC) August 24, 2018
Patrick had also implied that the CFTC was implicating him even though they had no regulatory authority. According to him, the prosecution was politically fabricated and the claims against him had been complete lies. The CFTC in order to acquire regulatory authority was using Cabbage tech Corp as a scapegoat as he told that that CFTC was asking for a budget increase in Washington by pointing to how they had enforced law over cryptocurrency crime. He also implied that CFTC intends to use his case to fuel their own ends.
Cryptocurrencies have long been used as an instrument to conduct frauds and swindles. Cabbage Tech Corp owner, Patrick Stewart might have rightfully been implicated for the criminal activity he conducted through his illegitimate business, but due to the vigilance of The US Commodities Future Trading Commission, he has been charged and now has to face the consequences.