According to a case filed by the Commission Future Trading, a cryptocurrency trading firm and its owner has been charged with a fine of $1.1 Million and has been banned from any future trading in digital assets.
In a case filed by CFTC against Cabbage Tech, also known as Coin Drop Markets and the company’s principal Patrick McDonnell, the district court of New York took a side of the commission in the verdict. The commission has accused the firm and its owner of defrauding clients.
District Judge Jack Weinstein gave his verdict that the Coin Drop Markets and Patrick McDonnell outcrossed the Commodity Exchange Act by getting into “egregious intentional violations” of laws and regulations.
Apart from a permanent ban from trading, the firm is required to pay a sum of around $1,161,716- $8,71,287 as penalties and $290,429 as restitution amount.
According to the Judge, the pieces of evidence presented during trials are strong enough to prove the firm’s principal and the firm has engaged in the fraudulent scheme last year between January and July. Those pieces of evidence included the fact that Patrick kept the firm’s employees and some other stakeholders under impression that the company was successful. On the other hand, the firm was operated by nothing more than its principal in his basement in Staten in New York.
At the end of June last year, McDonnell declared that Coin Drop Markets has been exploited by hackers while posting a message on firm’s website indicating that the firm wouldn’t be operational in the future as a consequence of the attack. Quite contrary, the court did not find any hacking done to the website and it was McDonnell who closed down the site eventually cutting off any communication with all the clients of the company.