The Commodity Futures Trading Commission announced that the U.S. District Court for the Southern District of Florida entered final default judgments against Mosaic Exchange Ltd. and its owner and CEO, Sean Michael, in the CFTC’s case alleging a fraudulent digital asset commodity scheme. The orders find the defendants liable for all violations of the Commodity Exchange Act and CFTC regulations alleged in the CFTC’s September 2023 complaint and impose monetary relief alongside permanent bans and injunctions. Mosaic and Michael must pay jointly and severally approximately USD 468,600 in restitution, USD 60,980 in disgorgement, and a USD 660,000 civil monetary penalty, and are permanently enjoined from the charged conduct, permanently barred from registering with the CFTC, and permanently banned from trading in any CFTC-regulated markets. The order finds that from February 2019 to June 2021 they fraudulently solicited 18 individuals in the United States and other countries to transfer bitcoin and other funds based on misrepresentations about assets under management, monthly profits, algorithm “win” rates, and purported relationships with cryptocurrency exchanges, and misappropriated customer funds, including for Michael’s personal expenditures, while Mosaic acted as a commodity pool operator and Michael as an associated person.

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