MIAMI, FL – Sean Michael, CEO of Mosaic Exchange Ltd., has been slapped with a hefty penalty for running a fraudulent digital asset scheme, according to court documents unsealed this week. The U.S. District Court for the Southern District of Florida entered final default judgments against both Michael and his company, Mosaic Exchange Ltd., on December 23 and 30, 2024.
The Commodity Futures Trading Commission (CFTC) originally filed a complaint against Michael and Mosaic on September 26, 2023, alleging fraud and misappropriation of funds. The court found them liable for violating the Commodity Exchange Act and CFTC regulations.
From approximately February 2019 to June 2021, Michael and Mosaic allegedly lured 18 investors – both in the U.S. and internationally – into transferring Bitcoin and other funds with false promises. These included claims of tens of millions of dollars in assets under management, consistent monthly profits, and high “win” rates for their trading algorithm. The court found these claims to be entirely fabricated.
Investigators determined Mosaic never possessed the claimed assets, the touted win rates were merely hypothetical projections, and trading accounts did not generate the advertised profits. Furthermore, the company lacked any legitimate partnerships or broker agreements with cryptocurrency exchanges, despite advertising otherwise. Michael, as the sole owner and CEO, reportedly used customer funds for personal expenses, including travel and dining.
The court ordered Michael and Mosaic Exchange Ltd. to jointly pay approximately $468,600 in restitution to defrauded investors, $60,980 in disgorgement, and a $660,000 civil monetary penalty. They are also permanently barred from engaging in any conduct violating the Commodity Exchange Act, registering with the CFTC, and trading on CFTC-regulated markets.
The case was led by CFTC staff members Steve Kim, Kara Mucha, Erica Bodin, Kathleen Banar, and Rick Glaser. The CFTC urges investors to verify registration through the NFA BASIC system before investing and to report suspicious activity via the toll-free hotline 866-FON-CFTC.
Source: CFTC.gov
Related Federal Cases
- Two Foreign Nationals, ID Theft Scheme, Los Angeles CA, 2023 · Florida
- Juan A. Tony Marrero, Medicare Fraud Scheme, Miami FL, 2023 · Florida
- Juan A. Tony Marrero, Medicare Fraud Scheme, Miami FL, 2024 · Florida
- John F. Rivers, Car Theft Scheme, New York, 2023 · Florida
- Michael Danzey Sentenced for Leading Fentanyl Cocaine Ring, New Yor… · Florida
