MIAMI, FL – Sean Michael, 41, of Miami, Florida, has been hit with a hefty penalty after the U.S. District Court for the Southern District of Florida found him liable for running a fraudulent digital asset scheme. The judgment, entered on December 23 and 30, 2024, follows a complaint filed by the Commodity Futures Trading Commission (CFTC) on September 26, 2023.
Michael, the owner and Chief Executive Officer of Mosaic Exchange Ltd., a Pennsylvania limited liability company, fraudulently solicited 18 individuals in the U.S. and internationally to invest in Bitcoin and other digital asset commodities. The CFTC alleged, and the court found, that Michael misappropriated customer funds for personal use, 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 – representing ill-gotten gains – and a $660,000 civil monetary penalty. The order permanently prohibits Michael from engaging in any conduct violating the Commodity Exchange Act (CEA), and bans him from registering with the CFTC or trading on any CFTC-regulated markets.
According to the court findings, from February 2019 to June 2021, Michael and Mosaic falsely claimed to have tens of millions of dollars in assets under management, consistently high monthly profits, and a successful trading algorithm. These claims were unsupported. The court determined Mosaic did not possess the advertised assets, did not achieve the stated win rates (which were, in fact, hypothetical projections), and did not generate the profits represented to investors. Furthermore, the company lacked the claimed partnerships with cryptocurrency trading exchanges.
The case was led by CFTC staff members Steve Kim, Kara Mucha, Erica Bodin, Kathleen Banar, and Rick Glaser. The CFTC urges the public to verify registration with the National Futures Association (NFA) before investing and to report suspicious activity via the CFTC’s toll-free hotline: 866-FON-CFTC.
Source: CFTC.gov
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