Crypto and Forex Fraudster To Pay $31M In CFTC Enforcement Action

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Crypto Fraud mastermind fined $31M in CFTC crackdown – Crypto News

Published

1 year ago

July 27, 2024

Dripp

Abner Alejandro Tinoco and his company Kikit & Mess Investments, LLC. will have to pay a total of $31 million as a penalty in a Commodity Futures Trading Commission (CFTC) crypto fraud enforcement move.

The Forex And Crypto Fraud From El Paso

According to the CFTC, Senior Judge David C. Guaderrama of the U.S. District Court for the Western District of Texas entered an order on July 9. The said order assesses monetary relief of over $31 million against Tinoco and his firm. Precisely, the monetary relief order requires both entities to pay more than $6 million to about 199 investors who suffered from the perpetrated crypto fraud.

Another $6.2 million in disgorgement with dollar-for-dollar credit, is designated for restitution to any victim. For civil monetary penalty, the court has requested for $18.7 million, which is approximately three times the value of unlawful gains Tinoco made from running the illegal scheme. All these fees round up to approximately $31 million.

This enforcement action comes at a time when the US electioneering campaign is in full gear. While Donald Trump and Kamala Harris are trying to get their angles right, there are no concessions for crypto fraud.

For context, 27-years Tinoco orchestrated a Ponzi scheme that he operated through his business. He solicited millions of dollars of investments from clients with claims that he would invest their money into funds dealing with cryptocurrency and foreign exchange markets.

Through misleading claims, the El Paso man secured $9 million from his victims. Instead of investing these monies as promised, Tinoco went on a spending spree, buying luxury cars, private jets, real estate and jewelry.

Us DoJ Sentence Tinoco to 84 Months in Prison

Two years ago, the court entered an initial consent order of permanent injunction against Tinoco and his firm. This prohibited them from violating the Commodity Exchange Act (CEA) and CFTC regulations any further. It also prohibited them from trading in any CFTC-regulated markets and registering with the regulator. Then in October 2023, the US Department of Justice sentenced Tinoco to 84 months in prison for wire fraud.

“The defendant orchestrated an elaborate cryptocurrency investment fraud scheme that caused extensive financial harm to unsuspecting victims,” Special Agent in Charge John S. Morales for the FBI El Paso Field Office said.

This latest order have finally resolved the CFTC’s case with both Tinoco and Kikit & Mess Investments. It underscores regulators effort to secure crypto investors and their holdings. It also comes a few hours after the SEC sued GameStop short seller Andrew Left for market manipulation.