Crypto Ponzi Scheme The Commodity Futures Trading Commission filed a lawsuit on Tuesday, revealing a multi-year scheme by a former pastor of a Spanish-speaking church in Washington state to deceive over 1,500 investors, including many of his congregants, out of over $5.9 million in cryptocurrency.
Pinillo Charged with Levebiraged Ponzi Scheme
Claiming to run a leveraged staking investment in digital assets from November 2021 to December 2023, Francis Obando Pinillo allegedly ran a Ponzi scheme. Pinillo allegedly committed fraud using his pulpit, social media, and other companies. He allegedly solicited investments by offering to trade their assets on the defunct FTX, and the complaint states that he did just that.
Pinillo allegedly instructed clients to deposit digital and fiat assets into wallets and accounts under his control while he was the CEO of Solanofi Entities. Profits of up to 34.9% a month were on the table, he said, thanks to his “proprietary bot” that he ran on the “Solanofi” platform for trading digital assets, which he called “risk-free.”
Pinillo Charged with Leveraged Ponzi Scheme
Additionally, Pinillo supposedly allowed clients to access their account statements online, which showed their purported balances. Through the use of this dashboard, they were able to monitor their imagined “profits.” The former pastor threw in some multi-level marketing to get more people involved. By enlisting the help of friends and family, he offered a 15% “referral fee” to his consumers. His remarks and assertions were false, the CFTC said.
Nobody used a trading platform, made any deals, or made any money during that time. All of the assets entrusted to Francis Obando Pinillo allegedly went missing. In a classic Ponzi scam, he used money from later investors to pay out fictitious “profits” and “referral” fees to earlier investors.
The CFTC is pursuing civil monetary fines and other remedies against the defendant, as President-elect Donald Trump considers them the primary cryptocurrency regulator. Some examples of these remedies are prohibitions on trading and registration, disgorgement, restitution, rescission, and interest before and after the decision.
Final Thoughts
The former pastor Francis Obando Pinillo is facing charges related to a Ponzi scheme that allegedly stole $5.9 million worth of Bitcoin from more than 1,500 unfortunate victims. Using a fraudulent leveraged staking investment and a trading platform that did not exist, he assured big returns. Pinillo recruited additional investors through MLM strategies and phoney account dashboards. He faces civil penalties and remedies from the CFTC.
FAQs
How did Pinillo attract investors?
He promised high returns through a fake leveraged staking investment and a non-existent trading platform, using his pulpit, social media, and multi-level marketing tactics.
What claims did Pinillo make to investors?
He claimed profits of up to 34.9% monthly, using a "proprietary bot" on the "Solanofi" platform, which turned out to be fraudulent.
How did the Ponzi scheme operate?
Later, investors' funds were used to pay fake "profits" and "referral fees" to earlier investors, while no actual trading or profits occurred.
What actions is the CFTC taking?
The CFTC seeks civil penalties, trading bans, restitution, and other remedies to address the fraud and recover lost funds.
