The Commodity Futures Trading Commission (CFTC) has ordered Utah-based Jacob Orvidas to pay up to $2 million in restitution and pay a $500,000 civil monetary penalty. The given order reveals Orvidas’ deceptive solicitation of at least four people to invest in a leveraged Bitcoin commodity pool, which resolves concurrently filed accusations.
The findings show that between October 2017 and July 2020, Orvidas deceitfully recruited pool members to engage in leveraged Bitcoin trading while making grand claims of substantial earnings and ensured financial security. He said that in one such case, a client turned a $100,000 Bitcoin investment into a mind-blowing $2.7 million. Participants invested almost $2 million in his commodity pool as a result of such claims, which turned out to be false.
The proceedings show that Orvidas almost ran out of money due to his failure to fulfil his trading obligations. He turned to creating fake spreadsheets that falsely displayed trading profits and large account balances in order to conceal these losses. When participants sought their promised profits and principle amounts, they were faced with false narratives, which resulted in a collective loss of more than $2 million.
The report further clarifies Orvidas’ failure to register as an operator of a commodity pool, which the CFTC views as a violation of the Commodity Exchange Act. As a result, Orvidas will be prohibited from engaging in both trading and registration activities for ten years.
The CFTC’s Ian McGinley said, “This bitcoin case is a straight-up fraud: simple and old as time.” He also emphasised the CFTC’s persistent dedication to protecting regular people from dishonest digital asset ventures.
Throughout this litigation, the Securities and Exchange Commission (SEC) was crucial in supporting the CFTC. Anthony Biagioli, Stephen Turley, Jeff Le Riche, Christopher Reed, and Charles Marvine led the case’s Division of Enforcement efforts.