CFTC Can Now Permanently Shut Down A Crypto Firm: New York Judge

BTC Wires: According to Bloomberg reports from August 24, Jack B.Weinstein, a New York District Judge has given a ruling in favour of the CFTC or the US Commodities Futures Trading Commission, thereby allowing a permanent ban on crypto firm CabbageTech for allegedly committing a fraud.

The earlier part of this year had seen crypto promoter and operator of CabbageTech, Patric McDonnell, face  charges of misappropriation and fraud with regard to buying and trading cryptocurrencies such as the Bitcoin (BTC) and Litecoin (LTC). McDonnell had defended himself saying that his commercial operations did not come under the ambit of CFTC jurisdictions. However, as of now, Judge Weinstein has rejected his defense.

Weinstein had presided over a non-hury trial in July, claiming during the proceedings that McDonnell was involved in fraudulent activity that lured in crypto investors from various states using a veritable combination of lies, tricks and laundering of funds. Finally, Weinstein gave the verdict that McDonnell would be liable to pay a whopping sum of $290,429 towards restitution and an even larger sum of $871,287 as penalties.

As per the report by Bloomberg, CabbageTech was unrepresented in court by any qualified advocate as McDonnell apparently did not have the means to afford a counsel. After a point the defendant himself also stopped coming to court on the days of trial.

McDonnell had been implicated in another lawsuit filed by the CFTC. That lawsuit was against a firm called Coin Drop and alleged that the company and McDonnell took money for crypto trading advice they eventually did not even provide. As per the charges, McDonnell was also responsible for shutting down the Coin Drop site and closing communication lines with disgruntled customers. In addition, the Coin Drop also happened to be unregistered with the CFTC

In July, Congressman Bill Huizenga had advocated the empowerment of financial regulators such as the CFTC and SEC so that they can work more efficiently towards ensuring compliance from firms. In May Chris Giancarlo, the CFTC chairman remarked that he hoped for more progressive regulation concerning the agency, although he did not seem to think it was forthcoming any time soon, given that the CFTC was still governed by a 1935 statute.