A U.S. District Court in New York has entered a default judgment against Benjamin Reynolds, finding him liable for a fraudulent scheme involving Bitcoin. Reynolds, purportedly of Manchester, England, is accused of misappropriating customer funds through a scheme targeting over 1,000 individuals globally, including at least 169 in the United States.
The court order, issued March 2, 2021, mandates Reynolds pay nearly $143 million in restitution to defrauded customers and a civil monetary penalty of $429 million. He is also permanently barred from engaging in activities violating the Commodity Exchange Act and CFTC regulations, as well as from registering with the CFTC or trading on regulated markets.
The judgment stems from a 2019 enforcement action initiated by the Commodity Futures Trading Commission (CFTC), which charged Reynolds, operating as Control-Finance Limited, with fraud and misappropriation. Between May and October 2017, Reynolds allegedly solicited approximately 22,190.542 Bitcoin – valued at roughly $143 million at the time – from customers via a website, social media, and email.
Reynolds is accused of falsely claiming Control-Finance traded customer Bitcoin deposits, generating guaranteed profits through specialized traders. He also allegedly built a fraudulent affiliate marketing network, promising inflated referral profits to incentivize new customers. However, the CFTC alleges no trades were ever made on behalf of customers, no profits were earned, and no referral rewards were paid.
Despite promising to return all Bitcoin deposits by late October 2017, Reynolds allegedly retained the funds for personal use, resulting in significant losses for his customers. The CFTC’s Digital Assets Task Force investigated the case, with assistance from the British Columbia Securities Commission and the UK Financial Conduct Authority.
The CFTC cautions that restitution orders do not guarantee recovery of lost funds, as wrongdoers may lack sufficient assets. The agency stated it will continue to pursue legal action against fraudulent actors to protect customers and ensure accountability.
Source: CFTC.gov
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