British citizen Benjamin Reynolds, ex-director of the crypto Ponzi scheme Control-Finance, has evaded regulators for six months following initial legal action against him for misappropriating over 22,000 Bitcoins.
Control-Finance was a multi-level marketing scheme that used the hype of the 2017 crypto markets to defraud over 1,000 customers.
The Commodity Futures Trading Commission (CFTC) sought to serve legal papers to Reynolds for civil monetary penalties, disgorgement of ill-gotten gains, trading bans, and permanent injunctions against launching such a scheme again.
However, Reynolds has been difficult to track down, leading the CFTC to request another 60 days to chase the elusive Brit.
Process servers in the UK attempted to serve Reynolds at his registered address in Manchester in July 2019, listed in official Control-Finance documents as his service address. However, the address was abandoned.
Telephone and email contact with Reynolds also proved fruitless, leaving the US regulator with few avenues to serve legal papers to the Ponzi director.
According to Finance Feeds, the CFTC filed a motion on January 3 with the New York Southern District Court requesting that Reynolds be served through the popular UK newspaper The Daily Telegraph rather than receiving the papers in person.
At this time, it’s unclear whether the motion will be passed. However, due to the amount involved, it’s highly likely the court will grant an extension at least.
Huge crypto Ponzi scheme
Reynolds defrauded customers in the period between May 1 to October 31 2017, a particularly volatile and hype-fueled period in the cryptocurrency markets.
In an initial press release dated June 2019, the CFTC accused Control-Finance and Reynolds of “misappropriating” customer funds worth in excess of $147 million at the time.
Through Control-Finance, Reynolds made outlandish claims, such as promising customers a 1.5% return on their investments per day and providing a safe-haven from Bitcoin market risks.
In reality, Reynolds was pooling BTC sent to his company in single wallets and siphoning it off for his own nefarious means.
In addition to the CFTC’s investigation, it’s thought that officials from the Ulsan District Prosecutors’ Office in South Korea are also investigating the crypto Ponzi.
You can read more about Bitcoin Ponzi schemes here.