On 10 February 2025, the United States Commodity Futures Trading Commission (US CFTC) announced that the United States District Court for the Eastern District of New York had entered an order dated 16 January 2025, against Rashawn Russell, a New York resident, in a US CFTC enforcement action. The order finds Russell liable for fraudulent solicitation and misappropriation of investor funds intended for digital assets trading and requires him to pay over $1.5 million in restitution to victims.
The order permanently enjoins Russell from engaging in activities that violate the Commodity Exchange Act and CFTC regulations. Additionally, it imposes an eight-year trading ban on him and prohibits him from registering with the CFTC, soliciting investments, or trading in any CFTC-regulated markets on behalf of third parties. The order resolves the CFTC’s enforcement action against Russell, originally filed on 11 April 2023.
According to the order, the US SEC alleges that between November 2020 and August 2022, Rashawn Russell engaged in a fraudulent digital asset trading scheme, soliciting investments from retail customers under false pretenses. The SEC claims that Russell misrepresented the structure, size, and performance of his purported trading fund, falsely assuring investors that their funds would be actively traded in digital assets. However, instead of executing trades as promised, the US SEC alleges that Russell misappropriated over $1.5 million, using customer funds for personal expenses, gambling-related activities, and Ponzi-like payments to prior investors. On 11 April 2023, the US CFTC filed a complaint against Russell, bringing charges of fraudulent solicitation and misappropriation of investor assets. Subsequently, on 19 September 2023, Russell pled guilty to one count of wire fraud in relation to the digital asset trading scheme and one count of access device fraud in an unrelated matter.
The U.S. District Court for the Eastern District of New York entered an order against him on 16 January 2025, requiring him to pay over $1.5 million in restitution to defrauded victims. The order further imposed a permanent trading ban in US CFTC-regulated markets and an eight-year prohibition on trading for his personal accounts. In a parallel criminal case, Russell was sentenced to more than three years in prison, along with three years of supervised release, and was ordered to pay restitution to the victims of his fraudulent activities.
The US CFTC’s case was pursued in parallel with a criminal action. On 19 September 2023, Russell pleaded guilty to one count of wire fraud in connection with the same trading scheme and an additional count of access device fraud linked to unrelated conduct. In United States v. Rashawn Russell, Case No. 23-CR-152 (E.D.N.Y. 2023), he was sentenced to over three years in prison, followed by three years of supervised release, and ordered to pay over $1.5 million in restitution.
The US CFTC acknowledged the assistance of the US Department of Justice, Fraud Section, in investigating and prosecuting the matter. The case was handled by the US CFTC’s Division of Enforcement staff, including Rebecca Jelinek, Steve Turley, Tom Simek, Chris Reed, and Charles Marvine.
(Source: https://www.cftc.gov/PressRoom/PressReleases/9050-25, https://www.cftc.gov/media/11776/%20enfrashawnrussellconsentorder011625/download)
