CFTC Orders $1.5 Million Restitution in Rashawn Russell Fraud Case
February 10, 2025
By Timely News Agency
The U.S. Commodity Futures Trading Commission (CFTC) has achieved a significant legal victory against Rashawn Russell, a New York resident now facing severe penalties following a fraudulent digital asset trading scheme. The U.S. District Court for the Eastern District of New York issued an order mandating Russell to pay over $1.5 million in restitution to victims he defrauded during his operation.
Details of the Court Order
The court order comes as a result of a CFTC action against Russell, which found that he had engaged in fraudulent solicitation and misappropriation of investor assets for a scheme purportedly centered on trading digital assets. The court’s ruling not only requires Russell to make restitution but also imposes permanent injunctions against him, barring him from engaging in conduct that violates the Commodity Exchange Act and CFTC regulations. This includes:
- A lifetime ban from registering with the CFTC and from soliciting or trading in any CFTC-regulated markets on behalf of third parties.
- A prohibition on trading for himself for a period of eight years.
The order marks a conclusive end to the CFTC’s legal actions against Russell, providing some relief to the affected investors.
Background of the Case
The trouble for Russell began with a CFTC complaint filed on April 11, 2023. According to the complaint, between November 2020 and August 2022, Russell orchestrated a scheme to lure in over two dozen retail investors. He solicited contributions in bitcoin, ether, and fiat currency for his alleged proprietary digital asset trading fund.
Investigations found that Russell made false and misleading claims about the fund’s structure, size, and performance to entice and keep investors. He failed to execute trades as promised and manipulated funds by issuing false assurances about withdrawal requests. Ultimately, Russell misappropriated more than $1.5 million from investors, diverting their assets for personal expenses, gambling activities, and even using funds to make payments to other investors in a Ponzi-like scheme.
Parallel Criminal Proceedings
In a related legal development, Rashawn Russell pled guilty on September 19, 2023, to one count of wire fraud linked to the same digital asset trading scheme highlighted in the CFTC’s complaint. Additionally, he pleaded guilty to one count of access device fraud concerning unrelated matters. For his crimes, Russell was sentenced to more than three years in federal prison, followed by an additional three years of supervised release, and is required to pay the same $1.5 million in restitution to his victims.
This case underscores the CFTC’s commitment to ensuring compliance with financial regulations and protecting investors from fraud in the rapidly evolving digital asset landscape.
Conclusion
The CFTC’s enforcement actions illustrate the agency’s ongoing efforts to tackle fraudulent practices within cryptocurrency trading. As the digital asset market continues to expand, both regulators and investors are advised to exercise due diligence and awareness of potential risks associated with trading in this volatile sector.
Rashawn Russell’s case serves as a cautionary tale for investors and reinforces the importance of regulatory frameworks in protecting the integrity of financial markets.
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