CFTC Prevails In Cryptocurrency Fraud Enforcement Action

Law360, New York (August 23, 2018, 7:55 PM EDT) -- A New York federal judge on Thursday ruled in favor of the Commodity Futures Trading Commission in its fraud suit accusing cryptocurrency trading advice company CabbageTech Corp. and its principal Patrick McDonnell of defrauding customers, ordering them to pay over $1.1 million and to refrain from any future trading in virtual currencies.

Following a hearing in Brooklyn that a pro se McDonnell declined to attend, U.S. District Judge Jack Weinstein found McDonnell and CabbageTech liable for “egregious intentional violations” of the Commodity Exchange Act.

“Defendants defrauded investors about the nature of the advice and managed trading services offered and then misappropriated...

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