A quick reminder: If someone says they can offer you returns of up to 300 percent by investing your money in crypto, odds are it isn’t on the up and up.
Yet David Gilbert Saffron, the creator of Circle Society, Corp. (not to be confused with Circle Internet Financial Limited of USD Coin fame) allegedly managed to sucker American investors out of $11 million, according to a complaint filed by the U.S. Commodity Futures Trading Commission on September 30. As a result, the U.S. District Court for the District of Nevada, where the corporation is based, has agreed to temporarily freeze the assets of both Saffron and Circle Society.
The CFTC complaint alleges that, since December 2017, Saffron has been running a Ponzi scheme. Apparently taking advantage of Bitcoin’s record highs and the general public’s lack of cryptocurrency knowledge, Saffron recruited at least 14 people into the scheme.
One tactic he allegedly used was claiming to trade for Mark Cuban, the billionaire owner of the NBA’s Dallas Mavericks. He also claimed to create such good returns—investors could double their money in two weeks, he said—by using trading bots on 57 separate computers, according to the complaint.
However, instead of trading the $11 million he collected, Saffron instead pocketed the money in his own cryptocurrency wallet, paid earlier investors, or misappropriated it in other ways, the CFTC alleges.
The CFTC is asking not only for the money to be returned but for financial penalties and a trading ban against Saffron and Circle Society.
Targets of Saffron’s alleged Bitcoin Ponzi scheme reported him on sites like Ripoff Report and Dirty Scam as far back as May 2018. The CFTC has a little more heft, effectively halting the scam.
Saffron, an Australian citizen, was last known to be living in Las Vegas. Court documents state that the CFTC has been unable to find him, though it believes he knows about the lawsuit. A hearing on the preliminary injunction is set for October 29.