The CFTC has accused Tennessee-based real estate business owners of running a fraudulent crypto scheme that allegedly swindled over 100 individuals out of more than $6 million.
The Commodity Futures Trading Commission (CFTC) initiated a lawsuit against Michael and Amanda Griffis on July 25, a couple residing in Tennessee, who allegedly exploited their real estate business clientele to conduct a crypto scheme.
The Griffises, who own EXIT Realty Screamin’ Eagle, are said to have deceived over 100 individuals, raising more than $6 million in the process.
The elaborate fraud involved a digital asset commodity pool, ironically titled “Blessings of God Thru Crypto.” The scheme appealed to investors with promises of outsized returns and a surefire opportunity to speculate on the future value of cryptocurrencies.
Misrepresenting the security of investors’ funds, the Griffises claimed these resources would remain in their control and would be used to trade “crypto futures” on the ‘Apex Trading Platform.’ Their so-called trading strategy was to supposedly follow the guidance of a shadowy figure referred to as “Coach Wendy.”
The CFTC has accused the couple of manipulating their professional relationships to lure victims into the commodity pool. This tactic often involved blending the pool funds with their personal accounts, an action at odds with proper financial management. The capital from unsuspecting investors, transferred to Michael Griffis’ account, was later shifted to his Coinbase account. Subsequently, the funds were converted into digital assets like Bitcoin (BTC) or Tether (USDT) and then moved onto the Apex Trading Platform for trading futures.
In what can be seen as a classic Ponzi scheme, a small percentage of the collected amount, roughly $855,000, was paid out to select investors. This repayment was not a reflection of successful trading but rather an attempt to maintain the illusion of legitimate operations, according to the CFTC.
The commission’s lawsuit against the Griffises seeks multiple forms of redress. The lawsuit aims for reimbursement for those defrauded, imposition of certain monetary penalties on the defendants, lifelong bans on trade and registration, and an enduring injunction against further contraventions of the Commodity Exchange Act (CEA) and CFTC regulations.
Ian McGinley, the CFTC’s director of enforcement, stated, “The defendants betrayed their pool participants, and they profited from that betrayal. Today’s filing reinforces the CFTC’s long-standing commitment to hold accountable those who take advantage of victims.”
This case serves as a reminder of the potential pitfalls in the still nascent and largely unregulated world of cryptocurrencies. The CFTC’s actions highlight the need for thorough due diligence before participating in any investment scheme, particularly those promising disproportionately high returns.