CFTC announces crypto fraud action after enforcement priorities shift

The US Commodity Futures Trading Commission (CFTC) announced a consent order charging a New York resident with fraud in one of the agency’s first crypto-related enforcement actions under acting Chair Caroline Pham.

In a Feb. 10 notice, the CFTC said US authorities had charged Rashawn Russell with engaging in a digital assets trading scheme from 2020 to 2022, in which he solicited investors to contribute cryptocurrency to a fraudulent fund. According to the complaint, Russell misappropriated roughly $1.5 million through the scheme, which had him plead guilty to wire fraud in the US District Court for the Eastern District of New York.

“Russell guaranteed no loss to investors, and in some instances, guaranteed a minimum twenty-five percent return,” said the CFTC complaint filed on Jan. 16. “In reality, Russell intentionally and/or recklessly made false or misleading statements to solicit and retain investors.”

The enforcement case was one of the agency’s first actions since acting Chair Pham announced on Feb. 4 that the CFTC would be restructuring its Division of Enforcement’s priorities to focus on fraud. The commission said it planned to divide responsibilities for enforcement cases into two task forces focused on retail fraud and “complex fraud and manipulation.”