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COMPLAINT FOR INJUNCTIVE AND OTHER EQUITABLE RELIEF AND FOR CIVIL MONETARY 

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JAMES H. HOLL, III (CA Bar No. 177885)

Email: jholl@cftc.gov

KAREN KENMOTSU (Pro Hac Vice Pending)

Email: kkenmotsu@cftc.gov

TRACI RODRIGUEZ (Pro Hac Vice Pending)

Email: trodriguez@cftc.gov

PAUL G. HAYECK (Pro Hac Vice Pending)

Email: phayeck@cftc.gov

Attorneys for Plaintiff

COMMODITY FUTURES

TRADING COMMISSION

1155 21st Street, N.W.

Washington, D.C. 20581

Telephone: (202) 418-5120

Facsimile: (202) 418-5531

THE UNITED STATES DISTRICT COURT

FOR THE CENTRAL DISTRICT OF CALIFORNIA

COMMODITY FUTURES

TRADING COMMISION,

Plaintiff,

v.

CUNWEN ZHU and JUSTBY 

INTERNATIONAL AUCTIONS, 

Defendants.

 

Civil Action No. 2:23-cv-4937

COMPLAINT FOR INJUNCTIVE

AND OTHER EQUITABLE 

RELIEF AND FOR CIVIL

MONETARY PENALTIES 

UNDER THE COMMODITY 

EXCHANGE ACT AND 

COMMISSION REGULATIONS

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Plaintiff, Commodity Futures Trading Commission (“Commission” or 

“CFTC”), by and through its undersigned attorneys, hereby alleges as follows: 

I. SUMMARY

1. From approximately April 2021 through March 2022 (the “Relevant 

Period”), Cunwen Zhu (“Zhu”) and his company, Justby International Auctions

(“Justby”) (Zhu and Justby together, “Defendants”), while acting as a common 

enterprise with other known and unknown entities (the “Scheme Entities”), engaged 

in a scheme to defraud at least twenty-nine (29) U.S. customers (“Scheme 

Customers”) by misappropriating more than $1,340,000 in connection with the sale 

of leveraged, margined, or financed agreements, contracts or transactions in offexchange retail foreign currency (“forex”) contracts and/or digital asset commodities, 

such as Bitcoin, to U.S. customers who were not eligible contract participants.

2. Defendant Zhu, individually, and as the controlling person of Justby, 

accepted Scheme Customers’ funds into Justby’s bank accounts knowing, or 

recklessly disregarding, that these funds were intended to be used to engage in forex 

and/or digital asset commodity transactions on behalf of the Scheme Customers. 

Defendants misappropriated all of the $1,340,000 they received from Scheme 

Customers by transferring the funds from Justby’s bank accounts to Zhu’s personal 

bank accounts. Once in his bank account, some of the funds were misappropriated by 

Zhu to pay for his personal expenses while the majority of the funds were further 

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transferred to other bank accounts, digital asset commodity trading accounts and 

digital wallet addresses controlled by the Defendants and the Scheme Entities.

3. Throughout the Relevant Period, the Defendants and the Scheme Entities 

acted as a single, integrated common enterprise in order to carry out their fraudulent 

scheme. The fraudulent scheme followed a similar pattern. Individuals acting on 

behalf of the Scheme Entities contacted the Scheme Customers via social media

(hereinafter, “Solicitors”). The Solicitors claimed to have knowledge or inside 

information that allowed them to earn huge profits trading in forex and/or digital 

asset commodities such as Bitcoin or Ether. The Solicitors offered to share their 

knowledge or inside information with Scheme Customers and to help them trade by 

providing particularized trading advice.

4. Most of the Scheme Customers were not eligible contract participants 

(“ECPs”) pursuant to Section 1a(18)(A)(xi) of the Commodity Exchange Act (“Act 

or “CEA”), 7 U.S.C. §1a(18)(A)(xi).

5. Once Scheme Customers decided to participate, the Solicitors introduced 

them to a trading firm (“Trading Firm”) where Scheme Customers set up their 

“trading accounts.” The Trading Firm customer service representatives (“TF 

Customer Service”) provided Scheme Customers with wire transfer instructions 

regarding the bank accounts to which they should wire their funds, such as Justby’s 

bank accounts; or, digital wallet addresses if the Scheme Customers were transferring 

digital asset commodities. Once received, customer funds were misappropriated by 

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the Defendants and Scheme Entities. Unbeknownst to the Scheme Customers, the

“trading accounts” were a complete ruse and no actual trading took place on behalf of 

the Scheme Customers. 

6. As part of the fraudulent scheme, TF Customer Service “assisted”

Scheme Customers in setting up their trading accounts by instructing them to 

download a third-party software application (“application”) onto their cellular 

telephone or mobile device. These applications would allegedly allow Scheme 

Customers to trade forex and digital asset commodities on legitimate, well-known

trading platforms. 

7. In fact, the applications did not interface with a legitimate trading 

platform and the Scheme Customers were actually interfacing with individuals who 

were also part of the fraudulent scheme. The applications only mimicked the features 

of a live trading platform by, among other things, allowing Scheme Customers to 

enter and track their trades, interface with customer service representatives, and check 

their account balances. The information contained in the applications, such as trade 

data and account history, was controlled by the Scheme Entities. 

8. Typically, Scheme Customers’ trading accounts showed that their

trading was highly successful and earning excellent profits. These representations 

were fictional. Scheme Customers’ funds were not used to trade and consequently, 

there were no profits. The Solicitors used these false profits to encourage customers 

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to transfer additional funds for trading. Many customers transferred additional sums 

with the Trading Firms based on these fictitious profits. 

9. Initially, Scheme Customers were able to withdraw small amounts of 

their funds. In fact, some Solicitors encouraged Scheme Customers to withdraw 

some of their funds as proof that the Trading Firm was legitimate.

10. However, if Scheme Customers attempted to close their account or 

withdraw large amounts from their trading accounts, they were met with great 

resistance. For example, TF Customer Service would inform the customer that they 

could not withdraw funds from their trading account until the customer sent in 

additional funds to cover taxes on their profits, which generally amounted to 25%-

30% of the value of the account. The Solicitor sometimes recommended a trade 

which would conveniently result in the Scheme Customer’s account having a 

negative balance. Alternatively, a trade would suddenly appear in the customer 

account which caused a negative balance in the account. Some Scheme Customers 

were further defrauded because they sent in additional funds to pay for their “taxes” 

or to cover their “negative balance.”

11. In the end, Scheme Customers lost nearly all of their trading funds. 

Other than the small withdrawals they may have made initially, Scheme Customers 

were unable to withdraw their funds or purported profits from their fictitious trading 

accounts.

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12. The Defendants misappropriated all of the $1,340,000 sent to Justby by 

the Scheme Customers. Zhu misappropriated some of the funds for his personal use. 

However, the majority of the Scheme Customer funds were transferred to offshore 

digital asset wallets, digital asset trading accounts, and bank accounts controlled by 

the Scheme Entities. 

13. In this manner, during the Relevant Period, the Defendants and the 

Scheme Entities operated an elaborate and well-coordinated scheme to fraudulently 

solicit, misappropriate, and funnel funds from U.S. customers to locations within and 

outside of the U.S. for the purpose of enriching themselves to the detriment of U.S. 

digital asset commodity and/or forex customers. 

14. Zhu individually, and as a controlling person of Justby, knew or 

recklessly disregarded, that the misappropriated funds were Scheme Customer funds

intended to be used for the purpose of trading forex and/or digital asset commodities.

15. By this conduct, and the conduct further described herein, Defendants 

have engaged, are engaging, and/or are about to engage in acts and practices in 

violation of Sections 4b(a)(2)(A)-(C) and 6(c)(1) of the Act, 7 U.S.C. §§ 6b(a)(2)(A)-

(C), 9(1), and Commission Regulations (“Regulations”) 5.2(b)(1)-(3) and

180.1(a)(1)-(3), 17 C.F.R. §§ 5.2(b)(1)-(3), 180.1(a)(1)-(3) (2022).

16. Unless restrained and enjoined by this Court, Defendants are likely to 

continue to engage in the acts and practices alleged in this Complaint, and similar 

acts and practices, as more fully described below.

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17. Accordingly, pursuant to Section 6c of the Act, 7 U.S.C. § 13a-1, and 

Section 2(c)(2)(C) of the Act, 7 U.S.C. § 2(c)(2)(C), the Commission brings this 

action to permanently enjoin Defendants’ unlawful acts and practices, to compel their 

compliance with the Act and the Regulations, and to further enjoin them from 

engaging in any commodity-interest related activity, as set forth below. In addition, 

the Commission seeks civil monetary penalties for each violation of the Act and 

Regulations, and remedial ancillary relief, including, but not limited to, trading bans,

restitution, disgorgement, an accounting, pre- and post-judgment interest, and such 

other relief as the Court deems necessary and appropriate.

II. JURISDICTION AND VENUE

18. This Court possesses jurisdiction over this action pursuant to 28 U.S.C. 

§ 1331 (codifying federal question jurisdiction) and 28 U.S.C. § 1345 (providing that 

U.S. district courts have original jurisdiction over civil actions commenced by the 

United States or by any agency expressly authorized to sue by Act of Congress). In 

addition, Section 6c of the Act, 7 U.S.C. § 13a-1(a), authorizes the Commission to 

seek injunctive relief against any person whenever it shall appear to the Commission

that such person has engaged, is engaging, or is about to engage in any act or practice 

constituting a violation of any provision of the Act or any rule, regulation, or order 

thereunder, and Section 2(c)(2)(C) of the Act, 7 U.S.C. § 2(c)(2)(C), provides the 

Commission with jurisdiction over the forex solicitations and transactions at issue in 

this action.

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19. Venue properly lies with this Court pursuant to Section 6c(e) of the Act, 

7 U.S.C. § 13a-1(e), and 28 U.S.C. § 1391(b) because Zhu resides in this District, 

Defendants transact or transacted business in this District, and certain of the 

transactions, acts, practices, and courses of business alleged in this Complaint 

occurred, are occurring, or are about to occur within this District. 

III. THE PARTIES 

A. PLAINTIFF 

20. Plaintiff Commodity Futures Trading Commission is an independent 

federal regulatory agency charged by Congress with the administration and 

enforcement of the Act and Regulations. The Commission maintains its principal 

office at Three Lafayette Centre, 1155 21st Street, N.W., Washington, D.C. 20581.

B. DEFENDANTS

21. Defendant Cunwen Zhu is resides in Walnut, California. Zhu is the 

chief executive officer and registered agent of Justby. Zhu has never been registered 

with the Commission in any capacity. 

22. Defendant Justby International Auctions is a stock corporation 

established by Zhu in April 2021 in the state of California with the address of 8926 E. 

Valley Boulevard, Rosemead, CA, 91770. Justby was allegedly engaged in the 

business of purchasing and selling Asian art, antiques and collectibles. Justby’s 

registration was terminated on February 6, 2023. Defendant Zhu acted as the chief 

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executive officer and registered agent of Justby. Justby has never been registered 

with the Commission in any capacity. 

23. During the Relevant Period, Zhu and Justby, together with other entities

under the control of known and unknown individuals, operated as a single, integrated 

common enterprise identified herein as the Scheme Enterprise. The Defendants and 

the Scheme Enterprise shared common customers, assets, solicitations, and were 

controlled by the same individuals. 

IV. STATUTORY BACKGROUND AND LEGAL FRAMEWORK

24. The purpose of the CEA or Act is to “serve the public interests . . . 

through a system of effective self-regulation of trading facilities, clearing systems, 

market participants and market professionals under the oversight of the 

Commission,” as well as “to deter and prevent price manipulation or any other 

disruptions to market integrity; to ensure the financial integrity of all transactions 

subject to [the] Act and the avoidance of systemic risk; to protect all market 

participants from fraudulent or other abusive sales practices and misuses of customer 

assets; and to promote responsible innovation and fair competition among boards of 

trade, other markets and market participants.” Section 3 of the Act, 7 U.S.C. § 5. 

25. A digital asset is anything that can be stored and transmitted 

electronically and has associated ownership or use rights. Digital asset commodities 

include virtual currencies, such as Bitcoin (BTC), Ether (ETH) and stablecoins such 

as Tether (USDT), which are digital representations of value that function as 

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mediums of exchange, units of account and/or stores of value. Additionally, digital 

asset commodities such as Bitcoin (BTC), Ether (ETH), stablecoins such as Tether 

(USDT) and others are “commodities” as defined under Section 1a(9) of the Act, 

7 U.S.C. § 1a(9).

26. In recent years, as digital asset markets have evolved, the CFTC has 

approved the offer of futures contracts on digital asset commodities, including 

Bitcoin and Ether futures and options, by boards of trade designated as contract 

markets by the Commission, including the Chicago Mercantile Exchange and Cboe 

Digital Exchange.

27. Section 2(c)(2)(C)(i)(I) of the Act, 7 U.S.C. § 2(c)(2)(C)(i)(I), in relevant 

part, applies to any agreement, contract, or transaction in, or in connection with, forex 

that is offered to, or entered into with, a person that is not an ECP “on a leveraged or 

margined basis, or financed by the offeror, the counterparty, or a person acting in 

concert with the offeror or counterparty on a similar basis,” subject to certain 

exceptions not applicable here. 

28. Section 1a(18)(A)(xi) of the Act, 7 U.S.C. § 1a(18)(A)(xi), defines an 

ECP, in relevant part, as an individual: (a) who has amounts invested on a 

discretionary basis, the aggregate of which exceeds $10 million, or (b) $5 million if 

the individual enters into the transaction to “manage the risk associated with an asset 

owned or liability incurred, or reasonably likely to be owned or incurred, by the 

individual.” Individuals who do not meet these criteria are non-ECPs. 

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V. FACTS

A. Defendant Zhu Operated Justby as a Shell Company

29. Defendant Zhu registered Justby International Auctions with the State of 

California as a stock corporation in April 2021.

30. Justby’s registered address was located in Rosemead, California. Justby 

claimed to be engaged in the business of purchasing and selling Asian art, antiques 

and collectibles.

31. Zhu is the CEO, sole owner, and registered agent for Justby. 

32. In sworn testimony before staff of the Commission, Zhu stated that he 

exercised sole control over all of Justby’s operations, including Justby’s bank 

accounts and employees. 

33. Zhu further claimed that Justby’s estimated expenditures were $200,000 

in 2021 and $80,000-$100,000 in 2022. He also represented that Justby’s revenues 

were approximately the same, with a maximum sale of around $10,000. 

34. During the Relevant Period, Zhu opened and controlled bank accounts in 

the name of Justby at multiple banks (“Justby’s bank accounts”). 

35. Despite Zhu’s claim that Justby only made sales of a few hundred 

thousand dollars per year, the aggregated total amount received into Justby’s bank 

accounts during the Relevant Period was in excess of $7,500,000 with approximately 

$1,340,000 coming from the Scheme Customers for purposes of entering into forex 

and/or digital asset commodity transactions.

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36. Despite Zhu’s claim that Justby’s largest sale was for approximately 

$10,000, Justby’s bank accounts routinely received numerous cash deposits, checks 

and wire transfers in excess of $200,000.

37. Justby lacks the indicia of a legitimate business. Specifically, Justby 

does not maintain books and records normally associated with an auction-type 

business such as a ledger of purchases and sales. 

38. Justby’s bank records do not reflect payments of the type commonly 

associated with a business such as a regular payroll, rent, insurance and utilities.

39. Justby’s claimed sales and expenditures do not align with its aggregated 

bank deposits of over $7,500,000.

B. The Fraudulent Scheme

40. Throughout the Relevant Period, the Defendants and the Scheme Entities 

acted as a single, integrated common enterprise in order to carry out their fraudulent 

scheme. The scheme involved the coordinated efforts of three groups: 

(1) “Solicitors" who contacted Scheme Customers via social media and pretended to 

befriend or romance the customers in order to solicit them to open and fund trading 

accounts; (2) “Trading Firms” which purported to set up trading accounts on behalf 

of Scheme Customers; and (3) “Shell Companies” such as Defendant Justby, whose 

bank accounts were used by the Defendants and Scheme Entities to accept and 

misappropriate Scheme Customer funds. 

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41. This type of fraudulent scheme is commonly referred to as a “Sha Zhu 

Pan” or “Pig Butchering” scheme by its operators because it involves cultivating a 

friendly or romantic relationship with a potential investor and “fattening” them up 

with falsehoods in order to gain the potential customer’s trust and eventually solicit 

them to invest in a fraudulent financial opportunity. 

42. Throughout the Relevant Period, the Solicitors spent time cultivating a 

friendly or romantic relationship with the Scheme Customers, most of whom were 

non-ECPs. At least one Scheme Customer, Customer A was in contact with their

Solicitor for over a year before they were convinced by their Solicitor to open and 

fund a forex trading account. 

43. Solicitors established a rapport with the Scheme Customers by 

messaging them frequently, sharing purported pictures of themselves in expensive 

locales or with expensive items such as luxury cars. The Solicitor always claimed to 

be a highly successful trader and usually attributed their success to an “uncle” or an 

“insider” who provided them with inside knowledge. 

44. In order to demonstrate their trading success, the Solicitor typically 

provided screen shots of their purported trading accounts which always showed 

incredible trading results. 

45. For example, around September 2021, Customer A was sent screen shots 

of their Solicitor’s purported forex trading results, which amounted to millions of 

dollars in profit in one day of trading. 

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46. Once the Solicitor gained the Scheme Customer’s trust, they encouraged 

the customer to open a forex and/or digital asset commodity trading account and

offered to share their inside knowledge with the Scheme Customer so that they too 

might earn extraordinary returns. 

47. Once a customer decided to participate, the Solicitor introduced the 

Scheme Customer to a Trading Firm. 

48. The Trading Firms instructed the Scheme Customers to download an 

application on their mobile phone or device in order to gain access to a forex and/or 

digital asset commodity trading platform. Although the trading platforms 

recommended to customers were legitimate, the application did not actually provide 

Scheme Customers with access to a legitimate trading platform. 

i. False Trade Records Provided to Scheme Customers

49. In fact, the application only allowed Scheme Customers to interface with 

individuals who were also part of the fraudulent scheme. The application merely 

mimicked the features of trading forex and/or digital asset commodities on a live 

trading platform. 

50. The Scheme Entities controlled the information provided to the Scheme 

Customers via the application. The application provided the Scheme Customers with 

fictitious information concerning, among other things: profits and losses, account 

balances, forex and/or digital asset commodity trading transactions, and deposits and 

withdrawals of funds into and out of their trading accounts. All of this information 

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was false since no actual forex and/or digital asset commodity trading took place on 

behalf of the Scheme Customers. 

ii. Scheme Customers Sent Funds to Justby’s Bank Accounts

51. In order to fund their purported trading accounts, TF Customer service 

provided Scheme Customers with Justby’s bank account details as well as the bank 

account details and digital wallet addresses for other entities who were part of the 

scheme. Customers often sent their wire transfers and digital asset commodity

transfers to multiple entities related to the Scheme Entities. 

52. For example, between May 5, 2021 through June 23, 2021, Customer B, 

who was not an ECP, transferred approximately $198,282 in both fiat currency, 

specifically the US Dollar, and digital asset commodities to bank accounts and digital 

wallets provided to Customer B by TF Customer Service for the purpose of funding a 

digital asset commodity trading account. On or about May 25, 2021, Customer B

sent $58,500 via wire transfer to a Justby bank account and the rest of Customer B’s 

investment funds were sent to other digital wallet addresses and/or bank accounts

related to the Scheme Entities. 

53. Scheme Customers’ purported trading account balances reflected the 

receipt of their wire transfers soon after the wire transfers were sent to Justby. In 

total, Justby received over $1,340,000 in wire transfers from Scheme Customers. 

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iii. Defendants and the Scheme Entities Used Forged Justby Bank 

Account Records to Defraud a Scheme Customer

54. TF Customer Service issued falsified bank records regarding one of 

Justby’s bank accounts to at least one Scheme Customer. 

55. Specifically, on or about July 8, 2021 TF Customer Service falsely 

represented to Customer B that their wire transfer of $58,500 never posted to a

Justby bank account and demanded that Customer B send in the “missing” funds. TF 

Customer Service sent Customer B falsified bank records which falsely showed that 

Justby never received Customer B’s wire transfer of $58,000 on May 25, 2021, when 

in fact, the funds were received on that day. 

iv. The Scheme Entities Used False Trading Successes to Solicit 

Additional Funds from Scheme Customers

56. Once their accounts were funded, the Solicitors provided Scheme 

Customers with specific trading advice. The Solicitors instructed the Scheme 

Customers regarding exactly which product the Scheme Customers should trade and 

when they should enter and exit each trade. 

57. Overall, the Scheme Customers were led to believe that they were 

earning incredible returns from their trading. Their Trading Firm accounts generally 

showed consistent wins with very few, if any, losses. 

58. For example, Customer A opened a forex trading account on or about 

October 2021. Between October 2021 and February 2022, this account purportedly 

accrued profits in excess of $2,000,000. 

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59. In addition, between May 2021 to June 2021, Customer B’s digital asset 

commodity trading account purportedly accrued profits in excess of $500,000.

60. The Solicitors used these purported successes to encourage customers to 

deposit additional funds with the Trading Firms. Many Scheme Customers did this 

multiple times, including Customers A and B. 

61. Initially, Scheme Customers were encouraged by their Solicitors to 

withdraw small sums from their purported trading accounts in order to prove the 

legitimacy of their Trading Firm. 

62. For example, around May 2021, Customer B withdrew $818 from 

Customer B’s trading account upon the advice and encouragement of Customer B’s

Solicitor.

63. However, when Scheme Customers attempted to withdraw large sums 

from their purported trading accounts or to close their accounts, they were unable to 

do so. 

64. For example, on or about May 28, 2021, Customer C sent a wire transfer 

in the amount of $500,000 from their bank account to one of Justby’s bank accounts

in order to fund a forex trading account. Customer C also sent additional wire 

transfers to other bank accounts under the control of other Scheme Entities. 

However, one of Customer C’s wire transfer attempts was stopped by their bank due 

to suspicion of fraud. At this point, Customer C became skeptical of their

transactions and their interactions with their Solicitor. When Customer C attempted 

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to withdraw $1,000,000 from their trading account, TF Customer Service informed 

Customer C that it would take up to ten (10) business days to receive the transfer. 

Customer C decided to conduct one last trade in their trading account following their

Solicitor’s specific trading instructions and this trade resulted in losses which left 

Customer C’s account with a negative balance. Customer C analyzed their last trade 

with existing market data and discovered an inconsistency in the market value 

between their last trade and the existing market data. 

65. The Trading Firms employed tactics to further defraud the Scheme 

Customers, such as telling Scheme Customers that they would need to pay taxes 

before their funds could be withdrawn. As a result, some of the Scheme Customers 

transferred additional funds to their trading accounts to cover these “taxes.” The tax 

payments were just a ruse and Scheme Customers were unable to withdraw their 

funds even after submitting the tax payments.

66. Apart from small withdrawals, none of the Scheme Customers were able 

to withdraw their funds from their Trading Accounts. Eventually, TF Customer 

Service stopped communicating with Scheme Customers and the applications ceased 

functioning. 

C. Defendants and the Scheme Entities Operated as a Common 

Enterprise

67. Together with the other Scheme Entities, Defendants Justby and Zhu 

operated as a common enterprise with a shared purpose of defrauding Scheme 

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Customers. Defendant Justby was a shell company which served no legitimate 

business purpose other than to accept and funnel funds to the Scheme Entities. 

68. Defendants and the Scheme Entities operated as an integrated whole in 

that they shared common control, assets, customers, fraudulent solicitations, and 

funneled customer funds to common entities, generally located offshore.

69. The coordinated manner in which Justby interacted with the Scheme 

Entities indicates there was a common control being exercised. For example, Scheme 

Customer funds deposited into Justby’s bank accounts were reflected very quickly in 

the Scheme Customers’ purported trading account balances. 

70. When Scheme Customers received a withdrawal from their purported 

trading accounts, the funds did not come from Justby’s bank accounts or digital asset 

commodity accounts. Instead, Scheme Customers received funds from other bank or 

digital asset commodity accounts under the control of the Scheme Enterprise.

D. Defendant Zhu Knew or Recklessly Disregarded that Scheme 

Customer Funds were Sent to Justby for Trading

71. As the sole signatory on the Justby bank accounts, Defendant Zhu had 

personal knowledge of the origin of funds being accepted into Justby’s bank accounts 

and was responsible for the disposition of those funds. 

72. Wire transfers from Scheme Customers contained notations indicating 

they were sent for purposes of trading and not for other services or goods, such as 

antiques. 

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73. For example, on or about May 25, 2021, one of Justby’s bank accounts

received a wire transfer from Customer D in the amount of $10,000 with the notation 

“Investment.”

74. On or about March 17, 2022, Customer E sent a wire transfer to one of

Justby’s bank accounts in the amount of $5,480 with the notation “Commodities.”

75. On or about March 9, 2022 Customer F sent a wire transfer to one of 

Justby’s bank accounts in the amount of $10,000 with the notation “Attn: Manager 

(name of trading firm) Account.”

76. Defendants also received funds from other scheme entities, which were 

unrelated to Justby’s purported “antiques” business. For example, on or about 

August 17, 2021, one of Justby’s bank accounts received a wire transfer in the 

amount of $160,000 from one of the Scheme Entities with a notation of “Investment 

Funds.”

E. Defendants Misappropriated Customer Funds for their Own Benefit 

and for the Benefit of the Scheme Entities

77. Defendants accepted the deposit of $1,340,000 from at least twenty- nine 

(29) Scheme Customers into bank accounts in the name of Justby and controlled by 

Zhu. Defendants and the Scheme Entities did not use the funds to enter into any 

forex agreements, contracts, or transactions on behalf of Scheme Customers. 

Moreover, Defendants and the Scheme Entities did not use the funds to enter into any 

digital asset commodity transactions on behalf of customers. 

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78. Instead, the Defendants misappropriated all of the Scheme Customer 

funds. Zhu misappropriated some of the funds for his personal use. The Defendants, 

however, used the vast majority of the customer funds to purchase digital asset 

commodities, such as less-traceable stablecoins like USDC (digital dollar), and then 

transferred those digital asset commodities to digital wallets and digital asset 

commodity trading platforms controlled by the Scheme Entities. In addition, 

Defendants also sent wire transfers to bank accounts controlled by the Scheme 

Entities. The Scheme Entities’ digital wallets, digital asset commodity trading 

platforms and bank accounts were generally located offshore.

79. Defendants never returned any funds to any Scheme Customer. 

Therefore, Scheme Customers lost more than $1,340,000 as a result of the 

Defendants’ fraudulent scheme. 

VI. VIOLATIONS OF THE COMMODITY EXCHANGE ACT AND 

COMMISSION REGULATIONS

COUNT I

(Defendants Zhu and Justby)

FRAUD IN CONNECTION WITH FOREX

Violations of Section 4b(a)(2)(A)-(C) of the Act, 7 U.S.C. § 6b(a)(2)(A)-(C), and 

Regulation 5.2(b)(1)-(3), 17 C.F.R. § 5.2(b)(1)-(3) (2022)

80. The allegations in paragraphs 1-79 are re-alleged and incorporated 

herein by reference.

81. Section 4b(a)(2)(A)-(C) of the Act, 7 U.S.C. § 6b(a)(2)(A)-(C), makes it 

unlawful: 

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[F]or any person, in or in connection with any order to 

make, or the making of, any contract of sale of any 

commodity for future delivery, [ . . . ] that is made, or to be 

made, for or on behalf of, or with, any other person other 

than on or subject to the rules of a designated contract 

market—(A) to cheat or defraud or attempt to cheat or 

defraud the other person; (B) willfully to make or cause to 

be made to the other person any false report of 

statement . . . [or] (C) willfully to deceive or attempt to 

deceive the other person by any means whatsoever in regard 

to any order or contract or the disposition or execution of 

any order or contract, or in regard to any act of agency 

performed, with respect to any order or contract for or, in 

the case of paragraph (2), with the other person.

82. Pursuant to Section 2(c)(2)(C)(iv) of the Act, 7 U.S.C. § 2(c)(2)(C)(iv), 

Section 4b of the Act, 7 U.S.C. § 6b, applies to the forex transactions, agreements, or 

contracts described in Section 2(c)(2)(C)(i) of the Act, 7 U.S.C. §2(c)(2)(C)(i), “as if” 

they were contracts of sale of a commodity for future delivery. Further, Section 

2(c)(2)(C)(ii)(I) of the Act, 7 U.S.C. § 2(c)(2)(C)(ii)(I), also makes those forex 

agreements, contracts, or transactions “subject to” Section 4b, 7 U.S.C. § 6b. Finally, 

Section 2(c)(2)(C)(vii) of the Act, 7 U.S.C. § 2(c)(2)(C)(vii), makes clear the CFTC 

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has jurisdiction over an account that is offered for the purpose of trading forex

described in Section 2(c)(2)(C)(i) of the Act, 7 U.S.C. §2(c)(2)(C)(i).

83. Regulation 5.2(b)(1)-(3), 17 C.F.R. § 5.2(b)(1)-(3), makes it unlawful for 

any person, by use of the mails or by any instrumentality of interstate commerce, 

directly or indirectly, in or in connection with any retail forex transaction: (1) to 

cheat or defraud or attempt to cheat or defraud any person; (2) willfully to make or 

cause to be made to any person any false report or statement or cause to be entered 

for any person any false record; or (3) willfully to deceive or attempt to deceive any 

person by any means whatsoever. 

84. During the Relevant Period, Defendants Zhu and Justby, acting as a 

common enterprise with the Scheme Entities, violated Section 4b(a)(2)(A)-(C) of the 

Act, 7 U.S.C. § 6b(a)(2)(A)-(C), and Regulation 5.2(b)(1)-(3), 17 C.F.R. § 5.2(b)(1)-

(3), by willfully deceiving or attempting to deceive other persons in, or in connection 

with, the offering of leveraged, margined or financed off-exchange retail forex 

transactions with non-ECPs, by among other things: (i) misappropriating Scheme 

Customer funds; (ii) sending, or causing false trading records to be sent to Scheme 

Customers; and (iii) sending or causing false bank records to be sent to a Scheme 

Customer.

85. Further, Defendants Zhu and Justby, acting as a common enterprise with 

the Scheme Entities, violated Section 4b(a)(2)(A) and (C) of the Act, 7 U.S.C. 

§ 6b(a)(2)(A), (C), and Regulation 5.2(b)(1) and (3), 17 C.F.R. § 5.2(b)(1), (3), by 

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knowingly and/or recklessly failing to disclose material facts to Scheme Customers, 

including by failing to disclose that: (i) their funds would not be used for trading; (ii) 

their funds would be misappropriated; and (iii) the applications used by the Trading 

Firms were completely fraudulent, no trading occurred and the posted returns were 

fake, all in violation of Section 4b(a)(2)(A) and (C) of the Act, 7 U.S.C. 

§ 6b(a)(2)(A), (C), and Regulation 5.2(b)(1) and (3), 17 C.F.R. § 5.2(b)(1), (3). 

86. The Defendants’ omissions were material because they deprived the 

Scheme Customers of valuable information that the customers would have considered 

when deciding to commit their funds. 

87. Defendants engaged in the acts and practices described above using 

instrumentalities of interstate commerce, including but not limited to: interstate wires 

for transfer of funds, email, websites, and other electronic communication devices.

88. Defendants engaged in the acts and practices described above willfully, 

intentionally, or recklessly.

89. Specifically, Zhu, acting both individually and as agent and officer of 

Justby, engaged in the acts and practices described above knowingly, willfully, or 

with reckless disregard for the truth. Zhu was an active participant in the fraudulent 

scheme. Zhu established his shell corporation Justby; opened bank accounts in the 

name of Justby; misappropriated customer funds; used some of the misappropriated 

funds to purchase less traceable digital asset commodities (stablecoins) and then

diverted the digital asset commodities and other funds to digital wallet addresses and 

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bank accounts which were controlled and operated by the Scheme Enterprise. In 

addition, Zhu or someone acting in concert with him, issued false bank records to at 

least one Scheme Customer for the purpose of soliciting the customer to transfer 

more funds to Justby.

90. Zhu controlled Justby directly or indirectly, and did not act in good faith 

and knowingly induced, directly or indirectly, Justby to commit the acts and/or 

omissions alleged herein. Therefore, pursuant to Section 13(b) of the Act, 7 U.S.C. 

§ 13c(b), Zhu is liable for Justby’s violations of Section 4b(a)(2)(A)-(C) of the Act,

7 U.S.C. § 6b(a)(2)(A)-(C), and Regulation 5.2(b)(1)-(3), 17 C.F.R. § 5.2(b)(1)-(3).

91. Zhu acted within the course and scope of his employment, agency, or 

office with Justby. Pursuant to Section 2(a)(1)(B) of the Act, 7 U.S.C. § 2(a)(1)(B),

and Regulation 1.2, 17 C.F.R. § 1.2 (2022), Justby is liable as the principal for Zhu’s

violations of Section 4b(a)(2)(A)-(C), 7 U.S.C. § 6b(a)(2)(A)-(C), and Regulation 

5.2(b)(1)-(3), 17 C.F.R. § 5.2(b)(1)-(3).

92. Each act of misappropriation, providing false trading and bank records to 

Scheme Customers, and failing to disclose material information to Scheme 

Customers, including but not limited to those specifically alleged herein, is alleged as 

a separate and distinct violation of Section 4b(a)(2)(A)-(C) of the Act, 7 U.S.C. 

§ 6b(a)(2)(A)-(C), and Regulation 5.2(b)(1)-(3), 17 C.F.R. § 5.2(b)(1)-(3).

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COUNT II

(Defendants Zhu and Justby)

FRAUD BY DECEPTIVE DEVICE OR CONTRIVANCE

Violations of Section 6(c)(1) of the Act, 7 U.S.C. § 9(1), and Regulation 

180.1(a)(1)-(3), 17 C.F.R. § 180.1(a)(1)-(3) (2022)

93. The allegations in paragraphs 1-79 are re-alleged and incorporated 

herein by reference.

94. Section 6(c)(1) of the Act, 7 U.S.C. § 9(1), makes it “unlawful for any 

person, directly or indirectly, to use or employ, or attempt to use or employ, in 

connection with any swap, or a contract of sale of any commodity in interstate 

commerce, or for future delivery on or subject to the rules of any registered entity, 

any manipulative or deceptive device or contrivance, in contravention of such rules 

and regulations as the Commission shall promulgate . . . .” 

95. Regulation 180.1(a)(1)-(3), 17 C.F.R. § 180.1(a)(1)-(3), makes it 

“unlawful for any person, directly or indirectly, in connection with any swap, or 

contract of sale of any commodity in interstate commerce, or contract for future 

delivery on or subject to the rules of any registered entity, to intentionally or 

recklessly:

1) use or employ, or attempt to use or employ, any 

manipulative device, scheme, or artifice to defraud; 

2) make, or attempt to make, any untrue or misleading 

statement of a material fact or to omit to state a 

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material fact necessary in order to make the 

statements made not untrue or misleading; [or]

3) engage, or attempt to engage, in any act, practice, or 

course of business, which operates or would operate 

as a fraud or deceit upon any person . . . .”

96. Digital asset commodities such as Bitcoin and Ether are encompassed in 

the definition of a “commodity” under Section 1a(9) of the Act, 7 U.S.C. § 1a(9), and 

contracts for their sale are subject to the prohibitions of Section 6(c)(1) of the Act, 

7 U.S.C. § 9(1), and Regulation 180.1(a)(1)-(3), 17 C.F.R. § 180.1(a)(1)-(3). 

97. Section 2(c)(2)(C)(ii)(I) of the Act, 7 U.S.C. § 2(c)(2)(C)(ii)(I), makes 

forex agreements, contracts, or transactions described in Section 2(c)(2)(C)(i) of the 

Act, 7 U.S.C. §2(c)(2)(C)(i), “subject to” Section 6(c)(1) of the Act, 7 U.S.C. § 9(1), 

and Regulation 180.1(a), 17 C.F.R. § 180.1(a). Further, Section 2(c)(2)(C)(vii) of the 

Act, 7 U.S.C. § 2(c)(2)(C)(vii), makes clear the CFTC has jurisdiction over an 

account that is offered for the purpose of trading forex described in Section 

2(c)(2)(C)(i) of the Act, 7 U.S.C. §2(c)(2)(C)(i).

98. During the Relevant Period, Defendants Zhu and Justby, acting as a 

common enterprise with the Scheme Entities, violated Section 6(c)(1) of the Act, 

7 U.S.C. § 9(1), and Regulation 180.1(a)(1)-(3), 17 C.F.R. § 180.1(a)(1)-(3), by, 

among other things, in connection with contracts of sale of commodities in interstate 

commerce and forex: (1) using or employing, or attempting to use or employ, a

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manipulative or deceptive device or contrivance, scheme or artifice to defraud;

(2) making omissions of material fact to Scheme Customers; and (3) engaging, or 

attempting to engage in any act, practice or course of business which operates as a 

fraud or deceit. Defendants Zhu and Justby did so by: (i) misappropriating customer 

funds; (ii) sending or causing to be to be sent, false trading records to Scheme 

Customers; and (iii) sending or causing to be sent, false bank records to at least one 

Scheme Customer for the purpose of soliciting funds from the customer. 

99. Further, Defendants Zhu and Justby, acting as a common enterprise with 

the Scheme Entities, violated Section 6(c)(1) of the Act, 7 U.S.C. § 9(1), and 

Regulation 180.1(a)(1)-(3), 17 C.F.R. § 180.1(a)(1)-(3), by, among other things, 

knowingly and/or recklessly failing to disclose material facts to Scheme Customers, 

including by failing to disclose that: (i) their funds would not be used for trading; 

(ii) their funds would be misappropriated; and (iii) the applications used by the 

Trading Firms were completely fraudulent, no trading occurred and the posted returns 

were fake. 

100. The Defendants’ omissions were material because they deprived 

Scheme Customers of valuable information that the customers would have considered 

when deciding to participate in trading forex and/ or digital asset commodities. 

101. During the Relevant Period, as alleged in paragraphs 1-79 above, 

Defendants, directly and/or indirectly, violated Section 6(c)(1) of the Act, 7 U.S.C. 

§ 9(1), and Regulation 180.1(a)(1)-(3), 17 C.F.R. § 180.1(a)(1)-(3). At all such times, 

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Zhu did not act in good faith or knowingly induced, directly or indirectly, Justby to 

commit the acts and/or omissions alleged as violations of Section 6(c)(1) of the Act, 

7 U.S.C. § 9(1), and Regulation 180.1(a)(1)-(3), 17 C.F.R. § 180.1(a)(1)-(3), as set 

forth herein. Pursuant to Section 13(b) of the Act, 7 U.S.C. § 13c(b), Zhu is liable as 

controlling person for Justby’s violations Section 6(c)(1) of the Act, 7 U.S.C. § 9(1),

and Regulation 180.1(a)(1)-(3), 17 C.F.R. § 180.1(a)(1)-(3).

102. During the Relevant Period, as alleged in paragraphs 1-79 above, Zhu

acted within the course and scope of his respective employment, agency, or office 

with Justby. Pursuant to Section 2(a)(1)(B) of the Act, 7 U.S.C. § 2(a)(1)(B), Justby

is liable as a principal for Zhu’s violations of Section 6(c)(1) of the Act, 7 U.S.C. 

§ 9(1), and Regulation 180.1(a)(1)-(3), 17 C.F.R. § 180.1(a)(1)-(3).

103. Defendants engaged in the acts and practices described above willfully, 

intentionally, or recklessly.

104. Defendants engaged in the acts and practices described above using 

instrumentalities of interstate commerce, including but not limited to: interstate wires 

for transfer of funds, email, websites, and other electronic communication devices.

105. Each act of misappropriation, fraudulently providing false records, and 

failing to disclose material information to Scheme Customers, including but not 

limited to, those specifically alleged herein, is alleged as a separate and distinct 

violation of Section 6(c)(1) of the Act, 7 U.S.C. § 9(1), and Regulation 180.1(a)(1)-

(3), 17 C.F.R. § 180.1(a)(1)-(3).

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VII. RELIEF REQUESTED

WHEREFORE, the Commission respectfully requests that this Court, as 

authorized by 7 U.S.C. § 13a-1, and pursuant to the Court’s inherent equitable 

powers, enter:

A. An order finding Defendants Zhu and Justby liable for violating Sections 

4b(a)(2)(A)-(C) and 6(c)(1) of the Act, 7 U.S.C. §§ 6b(a)(2)(A)-(C), 9(1), and 

Regulations 5.2(b)(1)-(3) and 180.1(a)(1)-(3), 17 C.F.R. §§ 5.2(b)(1)-(3), 180.1(a)(1)-

(3) (2022);

B. An order of permanent injunction permanently restraining, enjoining, 

and prohibiting Defendants Zhu and Justby, and any other person or entity associated 

with them, from engaging in conduct described above, in violation of Sections 

4b(a)(2)(A)-(C) and 6(c)(1) of the Act, 7 U.S.C. §§ 6b(a)(2)(A)-(C), 9(1), and 

Regulations 5.2(b)(1)-(3) and 180.1(a)(1)-(3), 17 C.F.R. §§ 5.2(b)(1)-(3), 180.1(a)(1)-

(3);

C. An order of permanent injunction prohibiting Defendants Zhu and Justby 

and any other person or entity associated with them from directly or indirectly:

(i) Trading on or subject to the rules of any registered entity (as that term is 

defined in Section 1a(40) of the Act, 7 U.S.C. § la(40));

(ii) Entering into any transactions involving “commodity interests” (as that 

term is defined in Regulation 1.3, 17 C.F.R. § 1.3 (2022)) or “digital asset 

commodities” (as described herein), including Bitcoin and Ether, for their 

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COMPLAINT FOR INJUNCTIVE AND OTHER EQUITABLE RELIEF AND FOR CIVIL MONETARY 

PENALTIES UNDER THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS

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own personal account(s) or for any account(s) in which any Defendant has 

a direct or indirect interest;

(iii) Having any commodity interests or digital asset commodities, including 

Bitcoin and Ether, traded on any Defendant’s behalf;

(iv) Controlling or directing the trading for or on behalf of any other person or 

entity, whether by power of attorney or otherwise, in any account 

involving commodity interests or digital asset commodities, including 

Bitcoin and Ether;

(v) Soliciting, receiving or accepting any funds from any person for the 

purpose of purchasing or selling any commodity interests or digital asset 

commodities, including Bitcoin and Ether;

(vi) Applying for registration or claiming exemption from registration with the 

Commission in any capacity, and engaging in any activity requiring 

registration or exemption from registration with the Commission, except 

as provided for in Regulation 4.14(a)(9), 17 C.F.R. § 4.14(a)(9)(2022);

and

(vii) Acting as a principal (as that term is defined in 17 C.F.R. § 3.1(a) (2022)), 

agent, or any other officer or employee of any person registered, exempted 

from registration, or required to be registered with the Commission, 

except as provided for in 17 C.F.R. § 4.14(a)(9);

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D. An order directing Defendants Zhu and Justby, as well as any successors 

thereof, holding companies, and alter egos, to disgorge, pursuant to such procedure as 

the Court may order, all benefits received from the acts or practices which constitute 

violations of the Act and Regulations, as described herein, and pre- and postjudgment interest thereon from the date of such violations;

E. An order directing Defendants Zhu and Justby, as well as any successors 

thereof, to make full restitution to every person who has sustained losses proximately 

caused by the violations of the Act and Regulations described herein, and pre- and 

post-judgment interest thereon from the date of such violations;

F. An order directing Defendants Zhu and Justby, as well as any successors 

thereof, to provide a full accounting of all Scheme Customer funds they have 

received during the Relevant Period as a result of the acts and practices that 

constituted violations of the Act and Regulations, as described herein;

G. An order directing Defendants Zhu and Justby to pay a civil monetary 

penalty, to be assessed by the Court, in an amount not to exceed the penalty 

prescribed by 7 U.S.C. § 13a-1(d)(1), as adjusted for inflation pursuant to the Federal 

Civil Penalties Inflation Adjustment Act Improvements Act of 2015, Pub. L. 114-74, 

129 Stat. 584 (2015), title VII, Section 701, see Regulation 143.8, 17 C.F.R. § 143.8

(2022), for each violation of the Act and Regulations described herein;

H. An order requiring Defendants Zhu and Justby to pay costs and fees as 

permitted by 28 U.S.C. §§ 1920 and 2412(a)(2); and

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COMPLAINT FOR INJUNCTIVE AND OTHER EQUITABLE RELIEF AND FOR CIVIL MONETARY 

PENALTIES UNDER THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS

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I. Such other and further relief as the Court deems proper.

Dated: June 22, 2023 Respectfully submitted,

U.S. COMMODITY FUTURES 

TRADING COMMISSION

/s/ James H. Holl, III

JAMES H. HOLL, III. CA Bar. No. 177885

KAREN KENMOTSU, Pro Hac Vice pending

TRACI RODRIGUEZ, Pro Hac Vice pending

PAUL G. HAYECK, Pro Hac Vice pending

Attorneys for Plaintiff

COMMODITY FUTURES

TRADING COMMISSION

1155 21st Street, N.W.

Washington, D.C. 20581

Telephone: (202) 418-5000

jholl@cftc.gov

kkenmotsu@cftc.gov

trodriguez@cftc.gov

phayeck@cftc.gov

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