- The US CFTC charged New York trader Rashawn Russell for a US$1.5M crypto fraud, marking one of its first enforcement actions under acting Chair Caroline Pham.
- Russell misused investor funds for personal expenses and Ponzi-like payments, falsely promising high returns. He pleaded guilty to wire fraud.
The US Commodity Futures Trading Commission (CFTC) has charged New York resident Rashawn Russell with fraud in one of its first crypto-related enforcement actions under acting Chair Caroline Pham.
According to a Feb. 10 announcement, Russell ran a fraudulent digital asset trading scheme between 2020 and 2022, misappropriating approximately US$1.5M (AU$2.39M) from investors. He had promised guaranteed returns, sometimes as high as 25%, but instead used the funds for personal gains:
The order finds Russell misappropriated over $1.5 million in customers assets through his fraudulent scheme, which he used, among other things, to pay personal expenses, entities associated with gambling activities, and Ponzi-like payments to current customers.
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Russell pleaded guilty to wire fraud in the US District Court for the Eastern District of New York.
Acting CFTC Boss Restructures Division of Enforcement
Pham has been occupied with the recent restructuring of the CFTC’s Division of Enforcement to prioritize fraud cases. The commission has divided enforcement into two task forces: one focusing on retail fraud and another on complex fraud and market manipulation.
Pham took over as acting chair on Jan. 20, following the inauguration of President Donald Trump. Former Chair Rostin Behnam stepped down the same day but remained at the CFTC until Feb. 7, leaving one commissioner seat vacant.
Under Behnam’s leadership in 2024, the CFTC reported over US$17 billion (AU$27.1 billion) in monetary relief, largely from actions against FTX. However, Pham’s approach suggests a shift in enforcement priorities, potentially reducing the regulatory focus on crypto firms dealing in commodities.
Related: VanEck Says SOL Could Hit $520 Soon as SEC Opens Door To Solana ETF
Crypto scammers are known for never taking a day off. They will hack DeFi protocols, design sophisticated phishing traps, create Ponzi schemes to lure naive users into their tricks, and even post fake job applications while impersonating companies and recruiters. These are just some of the most common crypto scams lately.
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