On 11 October 2024, the United States District Court for the Southern District of Florida issued an Order related to Case No. 24-cv-23745-ALTMAN. This case involves the US Commodity Futures Trading Commission and Traders Domain FX LTD, among other defendants. The order granted a motion filed by the US CFTC to unseal the case, allowing the case file and all related docket entries to be made publicly accessible.
The US CFTC had previously filed a complaint against Traders Domain FX LTD and its affiliates, accusing them of fraudulent activities, including the misrepresentation of trading operations and misappropriation of customer funds. The case was initially sealed, meaning that the public could not access its details. On 11 October 2024, the court granted the US CFTC’s motion to unseal the case, opening the documents and information within the case file for public viewing. The Order was signed by US District Judge Roy K. Altman.
On 30 September 2024, the US Commodity Futures Trading Commission filed a complaint in the US District Court for the Southern District of Florida against Traders Domain FX LTD and several associated individuals and entities. The complaint accuses the company and its affiliates of orchestrating a large-scale fraud involving false claims about their trading operations and the misappropriation of customer funds, including through cryptocurrency channels. The alleged scheme, which operated from November 2019, targeted US customers and failed to comply with US registration requirements. The US CFTC is seeking legal remedies such as injunctive relief, civil monetary penalties, and restitution for defrauded customers.
The fraudulent scheme involved Traders Domain FX LTD soliciting US customers to trade commodities such as gold (XAU/USD) through individual and pooled accounts. Customers were promised large profits, with claims of returns exceeding 5,000% in some cases. In reality, the company misled investors, recruited “sponsors” through a multi-level marketing (MLM) model, and ultimately diverted funds for unauthorized purposes. The company in August 2022 started delaying and denying customer withdrawals. Despite promises to resolve the issues, customers remain unable to access their funds, even after the company rebranded as Trubluefx in June 2023.
A major portion of the funds misappropriated by Traders Domain FX LTD was collected through cryptocurrency wallets. The defendants accepted deposits from customers via crypto wallets, giving the impression that these funds would be used for trading. However, much like the funds collected through traditional methods, these cryptocurrency deposits were misused. In October 2022, the company also partnered with a crypto payment processing firm based in Utah, which handled over US $16 million in customer deposits. Despite these transactions, customers were still unable to withdraw their funds. The US CFTC revealed that the majority of these deposits, whether through crypto wallets or other means, were never traded as promised, further worsening the situation for defrauded investors.
The US Commodity Exchange Act (Section 4b(a)(2)) addresses fraudulent solicitations, which the defendants violated by falsely claiming that customer funds were being used for legitimate trading. Under US CFTC Rule 1.1, the defendants also violated laws against misappropriating customer funds, diverting these funds for personal gain and Ponzi-style payments. Moreover, the defendants failed to register with the US CFTC, violating US Section 6m of the Act, which mandates registration for entities operating commodity pools.
The US CFTC in its complaint is seeking injunctive relief to halt the defendants’ illegal actions, civil monetary penalties as punishment for their fraudulent activities, restitution to return misappropriated funds to defrauded customers, and other equitable relief such as bans on trading and the return of illegally gained profits.
A motion to unseal is a formal request made by a party, asking the court to make a previously confidential case public. This is typically done when the need for privacy no longer exists, and the court may grant or deny this motion based on the circumstances. The unsealing of cases relates to the principle of public access to court records, a right protected under the First Amendment. Courts generally strive for transparency unless there are compelling reasons to keep a case confidential.
The US CFTC filed a motion to unseal the case i.e. Motion ECF No. 11 with the court, requesting that the previously sealed case and its docket be opened to public view. On 11 October 2024, the court issued an order granting this motion and directed the Clerk of Court to unseal the case and its docket entries. The Clerk of Court is instructed to unseal the case and all its docket entries, meaning that the case is now publicly accessible. This includes the complaint, motions, and all other documents filed in the case. The unsealing likely signifies that the investigation or legal concerns that initially required confidentiality have been addressed, allowing the public to view the full details of the case.
(Source: https://www.cftc.gov/PressRoom/PressReleases/8997-24, https://www.cftc.gov/media/11456/tradersdomainfxcomplaint93024/download, https://www.cftc.gov/media/11451/enftradersdomainfxltdcorder101524/download)
