The Commodity Futures Trading Commission announced that the U.S. District Court for the Eastern District of New York entered an order against Rashawn Russell in a CFTC case alleging fraudulent solicitation and misappropriation of customer assets purportedly raised to trade digital assets. The order requires Russell to pay over USD 1.5 million in restitution and imposes injunctions and trading and registration prohibitions. The order permanently enjoins Russell from conduct that violated the Commodity Exchange Act and CFTC regulations, permanently bars him from registering with the CFTC, and permanently bans him from soliciting for and trading in any CFTC-regulated markets on behalf of third parties. It also bans him from trading for himself for eight years. The findings stem from a CFTC complaint filed on April 11, 2023, covering conduct from November 2020 to August 2022 in which Russell solicited more than two dozen retail customers to contribute bitcoin, ether, and fiat currency to a purported proprietary trading fund, made false and misleading statements about the fund’s structure, size, and performance, failed to trade as represented, falsely promised withdrawals, and misappropriated over USD 1.5 million, including for personal expenses, gambling-related entities, and Ponzi-like payments. The order resolves the CFTC’s action against Russell. In a parallel criminal case, Russell pled guilty to wire fraud related to the same scheme and to access device fraud arising from unrelated conduct, and was sentenced to over three years in prison with three years of supervised release and ordered to pay over USD 1.5 million in restitution.

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