CFTC charges Debiex for fraudulent digital asset scheme

The Commodity Futures Trading Commission (CFTC) has filed a lawsuit against Debiex and Zhāng Chéng Yáng.

The CFTC complaint was submitted at the Arizona District Court on January 17, 2024.

From approximately March 2022 to the present (Relevant Period), Debiex, by and through its unknown officers and/or managers, engaged in a coordinated scheme to defraud at U.S. customers located in at least five states across the country. The scheme involved the misappropriation of at least $2.3 million from such customers in connection with the sale of digital asset commodities such as Bitcoin and Ether, as well as digital asset commodities futures contracts.

The scheme involved the coordinated efforts of at least three employee and/or agent groups: (1) “Solicitors,” who contacted Customers via at least one U.S.-based social media platform and pretended to befriend or romance the Customers in order to solicit them to open and fund trading accounts with Debiex; (2) “Customer Service,” which purported to set up and service Debiex trading accounts on behalf of the Customers; and (3) “Money Mules,” such as, but not limited to, Relief Defendant Zhāng Chéng Yáng, whose digital asset wallets were used by Debiex to accept and/or misappropriate Customer funds. These three groups were organized and supervised by Debiex’s unknown officers and/or managers.

The fraudulent scheme followed a pattern. Solicitors contacted Customers via U.S.-based social media platforms or messaging applications. By way of continuous and repeated contacts with Customers, whereby the Solicitors cultivated friendly or romantic relationships, Solicitors claimed to have knowledge or inside information that allowed them to earn huge profits trading in digital asset commodities such as Bitcoin or Ether or digital currency commodity futures contracts. Once Customers decided to participate, the Solicitors introduced them to Debiex’s websites, where the Customers were instructed to set up or were assisted by Customer Service with setting up their digital asset “trading accounts.”

Unbeknownst to the Customers, the Debiex websites merely mimicked the features of a legitimate live trading platform and the “trading accounts” depicted on the websites were a complete ruse. No actual trading took place on their behalf. Instead, once Debiex received Customer funds, such funds were misappropriated by Debiex.

Debiex is operated and overseen by currently unknown officers and/or managers. Based upon information and belief, Debiex’s unknown officers and/or managers: (i) directed and controlled the Solicitors, Customer Service personnel and Money Mules; (ii) created Debiex websites that mimicked the features of a legitimate live trading platform; (iii) misappropriated at least $2.3 million in Customer funds; and (v) sent, or caused false trading records to be sent, to Customers. These acts perpetuating Debiex’s fraudulent scheme are so dramatically false that some of Debiex’s unknown officers and/or managers must have known of their falsity

By this conduct, Debiex, through its unknown officers and/or managers have engaged, are engaging, and/or are about to engage in acts and practices in violation of Section6(c)(1) of the Commodity Exchange Act (“Act” or “CEA”), 7 U.S.C. § 9(1), and Commission Regulation (“Regulation”) 180.1(a)(1) and (3), 17 C.F.R. § 180.1(a)(1), (3) (2022).

The Commission seeks civil monetary penalties for each violation of the Act and Regulations, and remedial ancillary relief, including, but not limited to, trading bans, restitution, disgorgement, an accounting, pre- and post-judgment interest, and such other relief as the Court deems necessary and appropriate.

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