BOCA RATON, FL – Sean Michael, owner and Chief Executive Officer of Mosaic Exchange Limited, is facing charges of fraud following a civil enforcement action filed by the Commodity Futures Trading Commission (CFTC) in the U.S. District Court for the Southern District of Florida on September 27, 2023.
The CFTC alleges that Michael and Mosaic Exchange Limited engaged in a fraudulent scheme, soliciting funds from at least 17 individuals in the U.S. and internationally. From approximately February 2019 through June 2021, the defendants reportedly induced investors to provide hundreds of thousands of dollars in bitcoin and other funds, promising to trade digital asset commodities on their behalf. The agency claims these funds were then misappropriated.
According to the complaint, Michael falsely advertised Mosaic as a cryptocurrency trading platform managing tens of millions of dollars in assets. He allegedly promoted a proprietary trading algorithm with an 82% accuracy rate and claimed profit margins ranging from 20% to 60% – or even 10% to 50% – per month. He also purportedly misrepresented the existence of partnerships or broker agreements with cryptocurrency exchanges.
The CFTC alleges that these claims were false. In reality, Mosaic did not manage significant assets, the trading algorithm was unsuccessful, resulting in customer losses, and the advertised partnerships did not exist. As a result, investors reportedly lost all of their invested funds.
The CFTC is seeking restitution, disgorgement of ill-gotten gains, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against further violations of the Commodity Exchange Act (CEA) and CFTC regulations. The case is being litigated by Kathleen Banar, Steve Kim, Kara Mucha, and Rick Glaser of the CFTC’s Division of Enforcement.
The CFTC encourages the public to verify a company’s registration before investing and to report suspicious activity via the toll-free hotline 866-FON-CFTC or online. Whistleblowers may be eligible for a percentage of recovered monetary sanctions.
Source: CFTC.gov
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