Rashawn Russell, a New York resident, is facing both civil and criminal charges for allegedly defrauding retail investors out of at least $1 million through a digital asset trading fund. The Commodity Futures Trading Commission (CFTC) filed a civil enforcement action in the U.S. District Court for the Eastern District of New York on April 11, 2023.
The CFTC complaint alleges that from November 2020 to July 2022, Russell solicited investments in his purported proprietary digital asset trading fund, accepting bitcoin, ether, and fiat currency. He is accused of guaranteeing investors no losses and, in some cases, promising a minimum 25% return on investment.
According to the complaint, Russell allegedly made false and misleading statements regarding the fund’s structure, size, and performance. He reportedly traded little to none of the investor funds as represented and falsely promised to fulfill withdrawal requests, including payments in the stablecoin USDC. The CFTC claims Russell misappropriated at least $1 million, using the funds for personal expenses, gambling-related entities, and to make Ponzi-like payments to existing investors.
In a parallel criminal case, a federal grand jury returned a sealed indictment against Russell on April 6, which was unsealed today. He is charged with one count of wire fraud in the Eastern District of New York (Case No. 23-cr-00152). The Department of Justice’s Fraud Section assisted the CFTC in the investigation.
The CFTC is seeking restitution, disgorgement, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against Russell to prevent further violations of the Commodity Exchange Act (CEA) and CFTC regulations. The agency’s Director of Enforcement, Ian McGinley, stated the action demonstrates a commitment to holding accountable those who perpetrate fraud in the digital asset space and protecting retail investors.
Individuals with information regarding suspicious activity or potential violations of commodity trading laws are encouraged to contact the CFTC via its toll-free hotline (866-FON-CFTC), online tip form, or the CFTC Whistleblower Office. Whistleblowers may be eligible to receive a percentage of recovered monetary sanctions.
Source: CFTC.gov
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