A New York man has been permanently banned from trading after defrauding investors in a digital asset scheme, the Commodity Futures Trading Commission (CFTC) announced today. Rashawn Russell was found to have misappropriated over $1.5 million from more than two dozen retail customers between November 2020 and August 2022.
The U.S. District Court for the Eastern District of New York entered an order requiring Russell to pay over $1.5 million in restitution. He is permanently enjoined from violating the Commodity Exchange Act and CFTC regulations, barred from registering with the CFTC, and prohibited from soliciting or trading on CFTC-regulated markets for others. Additionally, Russell is banned from trading for his own account for eight years.
The CFTC’s complaint, originally filed on April 11, 2023, detailed how Russell falsely represented the structure, size, and performance of his purported digital asset trading fund to attract investors. He solicited contributions of bitcoin, ether, and fiat currency, but failed to trade the assets as promised. Investors’ withdrawal requests were falsely promised but often unmet.
Funds misappropriated by Russell were used for personal expenses, gambling-related entities, and to make Ponzi-like payments to existing investors, according to the order. This is in addition to a parallel criminal case where Russell pled guilty to one count of wire fraud and one count of access device fraud in September 2023.
Russell was sentenced to over three years in prison, followed by three years of supervised release, and also ordered to pay over $1.5 million in restitution as part of the criminal proceedings. The CFTC investigation was conducted by Rebecca Jelinek, Steve Turley, Tom Simek, Chris Reed, and Charles Marvine of the Division of Enforcement, with assistance from the Department of Justice, Fraud Section.
Source: CFTC.gov
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