UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK 

COMMODITY FUTURES TRADING 

COMMISSION, 

Plaintiff,

v. 

CONTROL-FINANCE LIMITED AND 

BENJAMIN REYNOLDS,

Defendants.

ECF Case No. 19-cv-5631 

COMPLAINT FOR INJUNCTIVE 

AND OTHER EQUITABLE RELIEF 

AND FOR CIVIL MONETARY 

PENALTIES UNDER THE 

COMMODITY EXCHANGE ACT 

AND COMMISSION REGULATIONS

Plaintiff Commodity Futures Trading Commission (the “Commission”), by and through 

counsel, alleges as follows:

I. INTRODUCTION

1. Since at least May 1, 2017, through the present, Defendant Control-Finance 

Limited (“Control-Finance”) and its sole Director, Defendant Benjamin Reynolds (“Reynolds”), 

(together, “Defendants”), exploited public enthusiasm for Bitcoin by operating a fraudulent 

scheme to misappropriate at least 22,858.822 Bitcoin—which reached a valuation of at least 

$147 million—from more than 1,000 members of the public (“customers”). 

2. From at least May 1 through October 31, 2017 (the “Relevant Period”), 

Defendants fraudulently solicited customers to purchase their own Bitcoin with cash and 

thereafter deposit their Bitcoin with Defendants. To facilitate these transactions, Defendants 

included hyperlinks to virtual currency processors (entities that buy and sell Bitcoin) on the main 

page of their public website, www.control-finance.com (the “Control-Finance Website”). 

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3. To entice customers to transfer Bitcoin to them, Defendants falsely represented 

that they employed expert virtual currency traders who earned guaranteed daily trading profits on 

customers’ Bitcoin deposits. 

4. To create the false impression that Defendants were successfully trading 

customers’ Bitcoin deposits in virtual currency markets, Defendants fabricated weekly “Trade 

Reports” and posted them to the Control-Finance Website. The Trade Reports reflected illusory 

virtual currency transactions and profits, when in reality Defendants made no trades on 

customers’ behalf and earned no trading profits for them. 

5. Defendants also manufactured an aura of profitability by diverting portions of 

new customers’ Bitcoin deposits to other customers in the manner of a “Ponzi” scheme, falsely 

representing that these misappropriations were in fact profits derived from virtual currency 

trading. 

6. Defendants’ fraud was not limited to touting non-existent virtual currency trading 

and profits. Rather, Defendants used the Control-Finance Website, as well as social media 

websites including Facebook, YouTube, and Twitter, to construct an elaborate pyramid scheme

they called the Control-Finance “Affiliate Program.” Through the Affiliate Program, Defendants 

fraudulently promised to pay, in the form of Bitcoin, escalating referral profits, rewards, and 

bonuses to “Affiliates”—consisting of any person who requested a referral hyperlink, regardless 

of whether he or she was an existing customer—based on the number of new customers they 

referred to Defendants. 

7. Throughout the Relevant Period, Defendants used the Control-Finance Website 

and social media to entice Affiliates to use their own social media accounts on websites 

including YouTube, Facebook, and Twitter, among others, to advertise Control-Finance’s

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purported virtual currency trading returns, to distribute referral hyperlinks to new customers, and 

to alleviate customers’ apprehension by reporting that Defendants had been paying them Bitcoin 

returns on their deposits. 

8. On or around September 10, 2017, Defendants, having fraudulently solicited at 

least 22,858.822 Bitcoin from customers, abruptly terminated operations by removing the 

Control-Finance Website from the Internet, halting payments to customers and Affiliate Program 

members, and deleting advertising content from Defendants’ Facebook, YouTube, and Twitter 

accounts. 

9. To deceive customers into believing that Control-Finance was only temporarily 

inactive and that customers’ Bitcoin deposits were safe and secure, Defendants fraudulently 

represented through email and Facebook that Defendants would make all customers whole by 

returning their Bitcoin deposits, minus any prior payments, by late October or November 2017. 

10. In reality, Defendants had no intention of resuming operations and deliberately 

lulled customers into complacency while Defendants set to work laundering nearly one hundred 

fifty million dollars in misappropriated Bitcoin through thousands of circuitous blockchain 

transactions. Defendants routed the great majority of these transactions through wallet 

addresses that Defendants established at CoinPayments of Vancouver, Canada. 

11. By this conduct, and as more fully alleged below, Defendants have engaged, are 

engaging in, and/or are about to engage in acts and practices in violation of the Commodity 

Exchange Act (the “Act”), 7 U.S.C. §§ 1-26 (2012), and its implementing Commission 

Regulations (“Regulations”), 17 C.F.R. pts. 1-190 (2018). In particular, Defendants violated 

Section 6(c)(1) of the Act, 7 U.S.C. § 9(1) (2012), and Regulation 180.1(a), 17 C.F.R. § 180.1(a) 

(2018). 

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

engage in the acts and practices alleged in this Complaint, and in similar illegal acts and 

practices.

13. Accordingly, pursuant to Section 6c of the Act, 7 U.S.C. § 13a-1 (2012), the 

Commission brings this action to permanently enjoin Defendants from further violations of the 

Act and Regulations and to seek civil monetary penalties and ancillary relief, including but not 

limited to permanent trading and registration bans, restitution, and disgorgement. 

II. JURISDICTION AND VENUE 

14. Jurisdiction. This Court possesses jurisdiction over this action pursuant to 28 

U.S.C. § 1331 (2012) (codifying federal question jurisdiction) and 28 U.S.C. § 1345 (2012) 

(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(a) of the Act, 7 U.S.C. § 13a-1(a) (2012), provides that U.S. district courts have 

jurisdiction to hear actions brought by the Commission for injunctive relief or to enforce 

compliance with the Act whenever it shall appear to the Commission that any person has 

engaged, is engaging, or is about to engage in an act or practice constituting a violation of any 

provision of the Act or any rule, regulation, or order thereunder. 

15. The Commission has anti-fraud authority over the conduct and transactions at 

issue in this action pursuant to Section 6(c)(1) of the Act, 7 U.S.C. § 9(1) (2012), and Regulation 

180.1(a), 17 C.F.R. § 180.1(a) (2018). 

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

7 U.S.C. § 13a-1(e) (2012), because acts and practices in violation of the Act occurred, are 

occurring, or are about to occur, within this District. Venue is appropriate in this district because 

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Defendants fraudulently solicited and misappropriated Bitcoin deposits from customers residing 

in this district. 

III. THE PARTIES

17. 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 1155 21st Street N.W., 

Washington, DC 20581. 

18. Defendant Control-Finance Limited is a now-defunct United Kingdom private 

limited company that was organized by Defendant Reynolds and incorporated by the Registrar of 

Companies for England and Wales (the “U.K. Registrar”) on September 8, 2016. ControlFinance maintained its Registered Office in Manchester, United Kingdom. On February 20, 

2018, the U.K. Registrar dissolved Control-Finance. Control-Finance has never been registered 

with the Commission in any capacity.

19. Defendant Benjamin Reynolds is an individual and United Kingdom national 

who resides in Manchester, England. On July 9, 2016, Reynolds submitted an application to the 

U.K. Registrar to incorporate Control-Finance as a U.K. private limited company. Reynolds was 

at all times Control-Finance’s sole Director and at all times owned 100% of Control-Finance’s 

1,000 equity shares. On September 6, 2016, Reynolds registered in his own name the 

www.control-finance.com Internet domain name. Reynolds has never been registered with the 

Commission in any capacity.

IV. STATUTORY AND CONCEPTUAL BACKGROUND

20. Bitcoin is encompassed within the definition of “commodity” under Section 1a(9) 

of the Act, 7 U.S.C. § 1a(9) (2012). 

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21. For purposes of this Complaint, Bitcoin, like all virtual or “crypto” currencies, is a 

digital representation of value that functions as a medium of exchange, a unit of account, and/or 

a store of value, but does not have legal tender status in any jurisdiction. Bitcoin is distinct from 

“real” currencies, which are the coin and paper money of sovereign jurisdictions that are 

designated as legal tender, placed into circulation, and used and accepted as a medium of 

exchange within the country of issuance. In contrast, Bitcoin uses cryptographic protocols to 

secure transactions and relies on decentralized, peer-to-peer networks to track and confirm 

transactions between parties identified only by publicly-visible character strings.

22. Blockchain, a form of distributed ledger technology, underpins Bitcoin and many 

other virtual currencies. Blockchain transactions are captured in single “blocks” at a time, which 

independent operators (called “miners,” a virtual analogue to actual miners whose efforts unearth 

precious metals) confirm by performing algorithmic proofs of work, in exchange for which they 

receive a sum of the virtual currency in question. The public nature of the decentralized ledger 

allows people to recognize the transfer of virtual currencies from one user to another without 

requiring any central intermediary that both users must trust.

23. For purposes of this Complaint, the term “wallet address” refers to a 26-35 digit

alphanumeric public key that operates similarly to a bank account and can be used to send and 

receive Bitcoin and other virtual currencies. For readability, wallet addresses are identified in 

this Complaint by their last 4 digits (see paragraphs 68, 70-77, 81). While anyone can send 

virtual currency to a particular wallet address, transferring virtual currency out of a wallet 

address requires a private key held by the owner of the wallet address. Unlike bank accounts, 

wallet addresses are public information and are recorded on the blockchain for viewing by 

members of the public. 

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24. For purposes of this Complaint, the term “Altcoin” refers to any virtual currency 

other than Bitcoin. 

V. FACTS

A. Operation of Defendants’ Fraudulent Scheme

25. During the Relevant Period, Defendants operated a complex fraudulent scheme in

which they solicited and misappropriated at least 22,858.822 Bitcoin from more than 1,000 

customers, some of whom reside in this District. Defendants induced United States customers to 

purchase Bitcoin from third-party vendors and to thereafter transfer the Bitcoin to Defendants. 

Defendants’ fraudulent scheme consisted of several components: 

i. The Control-Finance Website 

26. The nerve center of Defendants’ fraudulent scheme was the Control-Finance 

Website, which Defendants at all times owned and controlled. The Control-Finance Website 

was registered with a United States Internet hosting company located in San Francisco, 

California. As alleged below, Defendants used the Control-Finance Website to make material 

misrepresentations and omissions to prospective and existing customers to entice them to open 

Control-Finance accounts and deposit their Bitcoin with Defendants. 

27. Defendants also used the Control-Finance Website to provide customers with 

nominal, sham account balances and profit figures. In reality, the illusory account balances and 

profit statements that Defendants provided to customers were not backed up by actual Bitcoin, 

because Defendants had misappropriated the Bitcoin for their own use. 

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ii. Defendants’ Social Media Accounts

28. Defendants at all times owned and controlled social media accounts, including 

accounts at YouTube, Facebook, Twitter, and LinkedIn (collectively and without limitation, the 

“Social Media Accounts”). 

29. Throughout the Relevant Period, Defendants used the Social Media Accounts to 

make material misrepresentations and omissions to customers and to entice customers to open 

Control-Finance accounts and deposit their Bitcoin with Defendants. 

30. At various times during the Relevant Period, Defendants used the Social Media 

Accounts to advertise “contests” for the purpose of attracting new customers. For example, on 

July 7, August 4, and September 1, 2017, Defendants used the Control-Finance Facebook 

account to advertise “contests” whereby Facebook users were purportedly entered into a random 

drawing for Bitcoin “prize pools” if they “shared” Defendants’ contests through their own 

Facebook accounts. Defendants operated these contests for the purpose of attracting new 

customers for Defendants to defraud. 

iii. Email Communications

31. At all times, Defendants owned and controlled the admin@control-finance.com

email address (the “Control-Finance Email Address”). Defendants used the Control-Finance 

Email Address to communicate directly with and solicit customers, including customers residing 

within this District. 

32. Defendants used the Control-Finance Email Address to make false and 

fraudulent misrepresentations to customers about Defendants’ trading methods, abilities, and 

profits. 

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33. On September 11 and 12, 2017, after Defendants abandoned their scheme, 

Defendants used the Control-Finance Email Address to falsely inform customers that their 

Bitcoin deposits were safe and secure and would be returned to them. Defendants knowingly 

made these and other false statements to customers for the purpose of lulling customers into 

complacency while Defendants completed their misappropriation of customers’ Bitcoin deposits.

iv. The Control-Finance Affiliate Program

34. Throughout the Relevant Period, Defendants operated an “Affiliate Program” that

relied on fraudulently offering outsized referral profits, rewards, and bonuses, paid in Bitcoin, to 

encourage both customers and others to refer new customers to Defendants. 

35. Defendants operated the Affiliate Program by using the Control-Finance Website 

to generate referral hyperlinks that Affiliates could send to friends and family members and post 

publicly on the Internet, often with commentary advertising the supposed trading profits, 

rewards, and bonuses to be had by depositing Bitcoin with Defendants. 

36. The referral hyperlinks directed new customers to the Control-Finance Website, 

where they could view Defendants’ material misrepresentations and omissions and were 

encouraged to deposit Bitcoin with Defendants. Each time a new customer clicked on a referral 

hyperlink and deposited Bitcoin through the Control-Finance Website, Defendants “rewarded” 

the Affiliate by creating a nominal Bitcoin credit in the Affiliate’s Control-Finance Account. 

37. Defendants, in an effort to ensnare as many victims as possible and in the manner 

akin to a pyramid scheme, used the Affiliate Program to provide referral hyperlinks to anyone 

who requested one, even if the requestor had not personally deposited any Bitcoin with 

Defendants. 

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38. Defendants also offered special “VIP” benefits to higher-level Affiliates called 

“Representatives,” which Defendants defined as Affiliates who had themselves deposited at least 

$300 worth of Bitcoin with Defendants. Defendants used purported “VIP” benefits, including 

special access to Defendant Reynolds via online “chat” sessions, as well as other “rewards” and 

“bonuses,” to entice customers to become Representatives by depositing Bitcoin with 

Defendants.

39. Defendants also publicly offered downloadable website “banners,” which 

Affiliates could publicly post on social media websites and in online public forums. The banners 

contained embedded referral hyperlinks that redirected to the Control-Finance Website, where 

new customers could view Defendants’ material misrepresentations and omissions, open 

Control-Finance accounts, and deposit Bitcoin with Defendants. 

40. Defendants’ fraudulent scheme relied on exploiting the Affiliate network to 

widely advertise Control-Finance through social media, public websites, face-to-face 

interactions, and word-of-mouth, for the purpose of directing as many customers as possible to 

open accounts with Defendants, regardless of the size of each investment. By targeting huge 

numbers of victims, Defendants were able to fraudulently solicit Bitcoin deposits worth at least

$147 million despite requiring a minimum deposit of only $10 worth of Bitcoin. 

v. Sham Account Balances 

41. Customers who were enticed to deposit Bitcoin with Defendants were provided a 

deposit confirmation webpage through the Control-Finance Website. Each deposit confirmation 

webpage identified the quantity of Bitcoin deposited and the value of that Bitcoin in U.S. dollars. 

In addition, each deposit confirmation webpage identified the daily “Profit” that Defendants

promised to pay to customers on each deposit. Finally, each deposit confirmation webpage 

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stated that profit “Reinvestment” was available, and that profits could be withdrawn “at any 

time.” 

42. Contrary to the daily profit percentages stated in the deposit confirmation 

webpages, Defendants had no intention of actually paying profits or returns to the vast majority 

of customers. Rather, Defendants almost immediately misappropriated customers’ deposits by 

routing them to new wallet addresses that Defendants controlled. 

43. To conceal their misappropriation, Defendants used the Control-Finance Website

to generate automated profit credits that accrued in customers’ accounts each day. While

customers’ Control-Finance accounts falsely reflected growing balances, in reality those 

accounts were empty.

44. Defendants also intentionally and recklessly used the profit “Reinvestment” 

option to create disincentives to account withdrawals, allowing Defendants to misappropriate 

greater quantities of customers’ Bitcoin. By offering customers the option to reinvest their 

“profits” into a program that on its surface appeared to be highly profitable, Defendants 

concealed and prolonged their fraud by convincing customers that their deposits were rising in 

value, causing customers to leave their deposits in their Control-Finance accounts rather than 

request withdrawals. 

45. In instances where customers did request withdrawals from their Control-Finance 

accounts, Defendants illegally diverted Bitcoin deposited by other customers to satisfy the 

withdrawal requests.

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B. Specific Fraudulent Solicitations

i. Material Misrepresentations and Omissions Concerning Trading, Profits, and 

Accounts

46. Throughout the Relevant Period, Defendants intentionally and recklessly used the 

Control-Finance Website and the Social Media Accounts to make material misrepresentations 

and omissions about Defendants’ virtual currency trading methods, abilities, and profits, as well 

as customers’ account security and their ability to withdraw purported profits. Defendants

knowingly made these and other material misrepresentations and omissions with the intent to

solicit prospective and existing customers to transfer their Bitcoin to Defendants. 

47. Defendants intentionally and recklessly made the following material 

misrepresentations, among others, to prospective and existing customers: 

a. Throughout the Relevant Period, Defendants publicly represented the following 

on the “Trade reports” webpage of the Control-Finance Website: “Our team 

consists of professional traders using the following currency pairs: 

BITCOIN/USD, ETH/BITCOIN, ETC/BITCOIN, LTC/USD, and other Altcoins. 

All of our clients’ funds are used in real trading activities without exception.” 

(Emphasis added). These representations were false and fraudulent because 

Defendants knew that they did not employ professional traders, that they did not 

use customers’ deposits for trading, that they did not obtain Altcoins on 

customers’ behalf, and that Defendants misappropriated customers’ deposits. 

b. Throughout the Relevant Period, Defendants publicly advertised “Investment 

Offer” solicitations on the Control-Finance Website, guaranteeing returns “for 

[the] lifetime” of each deposit, and at various times bonus payments of 3% or 5% 

interest on each deposit. These representations were false and fraudulent because 

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Defendants knew that customers’ deposits did not earn profits, that customers did 

not receive interest bonus payments on their deposits, that customers’ ControlFinance accounts reflected sham balances and profit statements that were not 

supported by underlying Bitcoin, and that Defendants misappropriated customers’ 

deposits. 

c. Throughout the Relevant Period, Defendants publicly represented the following 

on the Control-Finance LinkedIn account: (i) “Control Finance 45% per month – 

Up to 1.5% every single day.”; and (ii) “Control Finance Investment. You get a 

profit up to 1.5% every single day!” (Emphasis added). These representations 

were false and fraudulent because Defendants knew that customers did not earn 

1.5% daily or 45% monthly profits, that customers’ account balances and profit 

statements were a sham, and that Defendants misappropriated customers’ 

deposits. 

d. Throughout the Relevant Period, Defendants used the Control-Finance Facebook 

account to fraudulently solicit customers by, among other things, posting the 

following on the account’s “About” webpage: “Earn 1.5% every single day. 

Passive income. Bitcoin Investment. Trade Reports.” (Emphasis added). These 

representations were false and fraudulent because Defendants knew that 

customers did not earn 1.5% daily profits, that customers earned no passive 

income on their deposits, that customers’ account balances and profit statements 

were a sham, and that Defendants misappropriated customers’ deposits. 

e. On June 23, 2017, Defendants used the Control-Finance Website to publicly 

advertise supposed account security enhancements, writing, “Control Finance 

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takes care of the funds of each client. We focus not only on generating profit but 

also on preserving your investments.” (Emphasis added). These representations 

were false and fraudulent because Defendants knew that they did not generate 

profits for customers, that they did not take any action to preserve customers’ 

investments, and that Defendants misappropriated customers’ deposits. 

f. On July 19, 2017, Defendants used the “News” section of the Control-Finance 

Website to publicly address supposed customer concerns about an anticipated 

bifurcation, or “fork,” within the Bitcoin market. Defendants described ControlFinance as a “safe haven” amidst market changes, representing that ControlFinance provided customers with “risk diversification and proper allocation of 

your assets.” Defendants further represented, “[o]ur company’s balance is 

calculated in US dollars, so we recommend that you invest right now, and you 

will be protected from possible bifurcation in the blockchain network.” These 

representations were false and fraudulent because Defendants knew that they 

provided no “risk diversification,” “proper allocation,” or other protection from 

Bitcoin market effects or bifurcations, and that Defendants misappropriated 

customers’ deposits. 

g. On July 21, 2017, Defendants used the “News” section of the Control-Finance 

Website to publicly represent: “Our specialist team of traders has developed a 

secure scheme for working with cryptocurrency exchanges, applying a 

diversification method by increasing the number of trading accounts on new 

cryptocurrency exchanges such as Bitfinex, Bitsamp and Okcoin.” These 

representations were false and fraudulent because Defendants knew that they did 

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not employ a specialist team of traders, that they took no action to develop a 

secure scheme for working with cryptocurrency exchanges, and that they applied 

no diversification methods to manage customers’ Bitcoin deposits.

h. On September 6, 2017, Defendants published a YouTube video in which an 

unidentified man, visible in an office setting displaying the Control-Finance logo 

on the wall, broadcast the misrepresentations identified in paragraph 47.g. above. 

The man in the YouTube video concluded by saying, “I am taking this 

opportunity to invite others to join. Go ahead and sign up now. We make money 

here.” The representations Defendants made in the September 6, 2017, YouTube 

video were false and fraudulent for the reasons alleged in paragraph 47.g. above.

48. Throughout the Relevant Period, Defendants used the Control-Finance Website

and the Social Media Accounts to make material omissions to prospective and existing 

customers about Defendants’ purported virtual currency trading abilities, methods, and profits, 

including, among other things, by failing to disclose that: (i) Defendants misappropriated 

customers’ Bitcoin deposits; and (ii) purported trading profits and returns paid to certain 

customers were in fact the misappropriated principal deposits of other customers. 

49. Defendants intentionally and recklessly made all of the material 

misrepresentations and omissions alleged in paragraphs 46-48 for the purpose of executing and 

concealing their fraud and enticing prospective and existing customers to transfer Bitcoin to 

Defendants.

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ii. Fabricated Weekly Trade Reports

50. Throughout the Relevant Period, Defendants used the Control-Finance Website to 

publicly advertise fabricated weekly “Trade Reports” that fraudulently represented profitable 

virtual currency trades that Defendants never placed. 

51. In addition to fabricating virtual currency trading data, the Trade Reports 

contained material misrepresentations and omissions that Defendants disguised as market 

analysis and used to entice prospective and existing customers to transfer their Bitcoin to 

Defendants. For example, the Trade Report for the period of July 3 through July 9, 2017, 

represented in part:

We observed Bitcoin exiting correction territory for short-terms 

during the previous trading week. Meanwhile Litecoin-related 

forecasts also scored. We successfully traded other altcoins as 

well. The current period is not the simplest for crypto currencies 

market [sic] because of Segwit implementation and the fact that 

July is traditionally not the most successful month for trading. But 

even in this situation we continue demonstrating stable results with 

a total profitability of 2-3% per day. 

These representations were false and fraudulent because Defendants knew that they did not trade 

virtual currencies on customers’ behalf, they did not achieve trading profits of 2-3% per day, and 

that Defendants misappropriated customers’ deposits.

52. As another example, the Trade Report for the period of July 17 through July 23, 

2017, represented in part: 

This trading week was full of events. The entire global 

cryptocurrency community followed the news about Bitcoin’s hard 

fork—the so-called SigWit2x. What did that give us? – Volatility! 

This is a great time for trading. As we reported earlier, our orders 

in the range of 1800-1950 worked and we had an excellent and 

lucrative week thanks to good news. 

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These representations were false and fraudulent because Defendants knew that they did not trade 

virtual currencies on customers’ behalf, they did not have an “excellent and lucrative week” 

trading virtual currencies, and that Defendants misappropriated customers’ deposits. 

53. Defendants’ Trade Report for the period of July 17 through July 23, 2017, also 

attempted to reassure customers that their deposits were safe. Defendants wrote, “I would like to 

again remind our customers to please not worry. Your money is safe. The only possible problem 

is that we may have unscheduled days off on July 31 and August 1 because of suspension of 

trading on cryptocurrency exchanges.” (Emphasis added). These representations were false and 

fraudulent because Defendants knew that customers’ money and Bitcoin deposits were not safe, 

that customers’ Control-Finance accounts were empty, and that Defendants misappropriated 

customers’ deposits. 

54. Defendants intentionally and recklessly made all of the material 

misrepresentations alleged in paragraphs 50-53 for the purpose of executing and concealing their 

fraud and enticing prospective and existing customers to transfer Bitcoin to Defendants. 

iii. Material Misrepresentations and Omissions Concerning the Affiliate Program

55. Throughout the Relevant Period, Defendants intentionally and recklessly used the 

Control-Finance Website and the Social Media Accounts to make material misrepresentations 

about the Control-Finance Affiliate Program. Defendants made these material 

misrepresentations to prospective and existing customers for the purpose of soliciting them to 

transfer their Bitcoin to Defendants, and to entice them to use the Internet, social media, face-toface interactions, and word-of-mouth to market Control-Finance to other victims. 

56. Defendants intentionally and recklessly made the following material 

misrepresentations, among others: 

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a. Throughout the Relevant Period, Defendants publicly advertised the ControlFinance Affiliate Program on the Control-Finance Website by writing: (i) “Open

an account and start earning a passive income daily. The activity of your referrals 

will guarantee you a comfortable livelihood.”; and (ii) “Already got your affiliate 

team? Then prepare to see your profit skyrocket!” (emphasis added). These 

representations were false and fraudulent because Defendants knew that the 

Affiliate Program did not provide passive income or profits to customers, could 

not “guarantee” a livelihood, and that Defendants misappropriated customers’ 

deposits. 

b. Throughout the Relevant Period, Defendants publicly advertised the ControlFinance Affiliate Program on the Control-Finance Website by promising to pay 

escalating Bitcoin returns, rewards, and bonuses to reward Affiliates for bringing 

greater numbers of new customers to Defendants. Defendants’ representations 

about escalating Bitcoin returns, rewards, and bonuses were false and fraudulent 

because Defendants had no intention of actually paying most Affiliates the 

promised returns, rewards, and bonuses, and that Affiliates’ Control-Finance 

accounts nominally reflected sham balances that did not in fact exist.

c. Throughout the Relevant Period, Defendants used the Control-Finance Website to 

provide Affiliates with downloadable website “banners” containing embedded 

hyperlinks. Defendants encouraged Affiliates to post the banners on Internet 

websites and social media to direct new customers to the Control-Finance 

Website. Defendants also displayed material misrepresentations on the banners 

for the purpose of enticing Internet users to click on them. Among other material 

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misrepresentations, Defendants’ banners represented the following: (i) “EARN 

UP TO 1.5% DAILY!”; and (ii) “REAL COMPANY WITH REAL TRADING.” 

These representations were false and fraudulent because Defendants knew that 

customers’ deposits did not earn up to 1.5% daily profits and that Defendants did 

not conduct any trading on customers’ behalf. 

d. On July 13, 2017, Defendants used the Control-Finance Website to publicly 

represent:

In response to numerous requests made by our partners, we 

deployed the 1st planned upgrade to our affiliate program. 

Now you will receive affiliate remuneration in full for 

every deposit replenishment made by your referral. Now it 

has become even more profitable for you to invest your 

profit and bonuses. 

These representations were false and fraudulent because Defendants knew that 

Affiliates would not receive remuneration for their referrals’ deposits, that 

investing profits and bonuses back into Control-Finance would not create any 

profits for Affiliates, and that Affiliates’ account balances and profit statements 

were shams. 

e. Throughout the Relevant Period, Defendants used the Control-Finance Website 

and the Social Media Accounts to make material omissions to prospective and 

existing customers about the Affiliate Program, including, among other things, by 

failing to disclose that: (i) Defendants misappropriated customers Bitcoin 

deposits; and (ii) purported trading profits and returns paid to some customers

were actually the misappropriated principal deposits of other customers. 

57. Defendants intentionally and recklessly made all of the material 

misrepresentations and omissions alleged in paragraphs 55-56 for the purpose of executing and 

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concealing their fraud and enticing prospective and existing customers to transfer Bitcoin to 

Defendants.

iv. Fraudulent Email Communications

58. Throughout the Relevant Period, Defendants used the Control-Finance Email 

Address to make materially false misrepresentations and omissions to customers. At all times, 

Defendants owned and controlled the Control-Finance Email Address. 

59. By way of example, when customers opened Control-Finance accounts, 

Defendants used the Control-Finance Email Address to contact customers with account login 

details and to write the following: “Now you have the unique opportunity to make a profit on 

transactions in the lucrative cryptocurrency market and earn passive income from our affiliate 

program.” These representations were false and fraudulent because Defendants knew that 

customers did not earn profits on cryptocurrency transactions with Defendants, that customers

did not earn passive income from the Affiliate Program, and that Defendants misappropriated 

customers’ deposits. 

60. Throughout the Relevant Period, Defendants used the Control-Finance Email 

Address to notify customers that Defendants had posted Trade Reports, which Defendants 

fabricated, to the Control-Finance Website. By way of example, on August 19, 2017, 

Defendants used the Control-Finance Email Address to contact Customer D.S., a U.S. resident, 

with the following message: “We posted Company’s [sic] weekly trade report covering the 

period August 07, 2017, to August 13, 2017. You can have a look at it [sic] clicking on the 

following link. . . .” Defendants’ purpose in sending this email, and others like it, was to direct 

customers to visit the Control-Finance Website, to view Defendants’ fabricated Trade Reports, 

and to be fraudulently enticed to deposit additional Bitcoin with Defendants. 

Case 1:19-cv-05631 Document 1 Filed 06/17/19 Page 20 of 36
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61. Defendants intentionally and recklessly made all of the material 

misrepresentations and omissions alleged in paragraphs 58-60 for the purpose of executing and 

concealing their fraud and enticing prospective and existing customers to transfer Bitcoin to 

Defendants.

D. Defendants’ Misappropriation Scheme

62. Defendants used the Control-Finance Website as a conduit to receive Bitcoin 

deposits from customers and to then misappropriate those deposits in at least two ways: (i) by 

executing circuitous blockchain transactions that misappropriated customers’ Bitcoin deposits by 

moving Bitcoin into other wallet addresses under Defendants’ control; and (ii) by illegally 

diverting customers’ Bitcoin deposits to make Ponzi scheme-like payments to other customers

who requested withdrawals from their own Control-Finance accounts. 

63. During the Relevant Period, Defendants misappropriated at least 22,858.822 

Bitcoin from customers. 

i. Single-Use Addresses and Pool Addresses

64. Defendants’ misappropriation scheme relied on creating unique, single-use wallet 

addresses (“Single-Use Address(es)”) to receive customers’ Bitcoin deposits. In most cases, 

Defendants used each Single-Use Address for one pair of transactions: (i) to receive a Bitcoin 

deposit from a customer, and (ii) to route the customer’s deposit to one of a number of pooled 

wallet addresses (“Pool Address(es)”) into which Defendants transferred misappropriated 

Bitcoin from hundreds of Single-Use Addresses. At all times, Defendants owned, controlled, 

and operated the Single-Use Addresses and the Pool Addresses. 

65. Defendants typically created a new Single-Use Address for every customer 

deposit. In typical transactions, customers logged into the Control-Finance Website and 

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accessed the deposit webpage. The Control-Finance Website then generated a unique SingleUse Address for the specific deposit. After a customer deposited Bitcoin with the Single-Use

Address, Defendants routed the deposit out of the Single-Use Address and into a Pool Address, 

where the deposit was combined with numerous deposits by other customers. Defendants then 

misappropriated the Bitcoin in each Pool Address by transferring it to other wallet addresses 

under Defendants’ control, including wallet addresses held at CoinPayments of Canada, Bithumb 

and Coinone of South Korea, Shapeshift of Switzerland, and Remitano of Seychelles. 

66. Defendants’ misappropriation strategy relied on obfuscation. To make it difficult 

for customers to track the movement of their Bitcoin deposits through the blockchain, 

Defendants typically executed “split” payments when transferring customers’ Bitcoin out of 

Single-Use Addresses and into Pool Addresses. To execute a split payment, Defendants 

transferred the great majority of a customer’s Bitcoin deposit out of a Single-Use Address and 

into a Pool Address. Defendants simultaneously transferred the remainder of the customer’s 

Bitcoin deposit out of the Single-Use Address and into another wallet address that held a 

relatively small Bitcoin balance. 

67. To execute their misappropriation scheme, on May 28, 2017, Defendants 

established User ID *294 at virtual currency payment processor CoinPayments of Vancouver, 

Canada. Defendants used CoinPayments User ID *294 to establish at least 45 Pool Addresses 

into which Defendants funneled 22,190.542 misappropriated Bitcoin from Single-Use Addresses.

68. In addition to the wallet addresses that Defendants established under 

CoinPayments User ID *294, Defendants created Pool Addresses at several other virtual 

currency payment processors and exchanges, including BTC-e of Russia, Huobi of Singapore, 

and Korbit of South Korea. During the Relevant Period, Defendants used these Pool Addresses 

Case 1:19-cv-05631 Document 1 Filed 06/17/19 Page 22 of 36
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to misappropriate at least 668.28 Bitcoin from customers by transferring 90.348 Bitcoin into 

BTC-e Pool Address *Np4s, 554.943 Bitcoin into Huobi Pool Addresses *CBLw and *QeW6, 

and 22.989 Bitcoin into Korbit Pool Address *xYpm. 

69. In total, Defendants misappropriated at least 22,858.822 Bitcoin from customers

during the Relevant Period. 

ii. CoinPayments Address *uk1x

70. Of the Pool Addresses that Defendants established under CoinPayments User ID 

*294, one in particular was central to Defendants’ misappropriation scheme: CoinPayments 

Address *uk1x, through which Defendants misappropriated 5,184.65 Bitcoin from customers. 

At all times, Defendants owned, controlled, and operated CoinPayments Address *uk1x. 

71. During the Relevant Period, Defendants used CoinPayments Address *uk1x in at 

least two ways: (i) as a Pool Address, in that Defendants used CoinPayments Address *uk1x to 

receive misappropriated Bitcoin from numerous Single-Use Addresses, and (ii) as a repository 

for consolidating misappropriated Bitcoin deposits from other Pool Addresses. 

72. During the Relevant Period, Defendants transferred misappropriated Bitcoin from 

at least the following five Pool Addresses into CoinPayments Address *uk1x: *b2p5, *Tebs, 

*Q4DM, *fhB2, and *qEpB. 

73. Throughout the Relevant Period, Defendants often executed circuitous blockchain 

transactions to move misappropriated Bitcoin into CoinPayments Address *uk1x. These 

transactions had no valid business purpose and were designed solely to obfuscate the illegal 

movement of customers’ Bitcoin. The following transaction is an example of Defendants’ 

efforts to obscure their misappropriation scheme: 

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a. On August 21, 2017, Defendants initiated blockchain transaction *adcc, which 

resulted in 59 Single-Use Addresses transferring a total of 62.488 Bitcoin to Pool 

Address *b2p5. 

b. Immediately thereafter, Defendants initiated blockchain transaction *996c, which 

routed the 62.488 Bitcoin just received by Pool Address *b2p5 into two 

transactions: (i) 50.018 was transferred to CoinPayments Address *uk1x; (ii) 

12.469 was transferred to wallet address *x9uc. 

c. Immediately thereafter, Defendants executed blockchain transaction *2fcb, which 

resulted in 12.467 Bitcoin transferring from wallet address *x9uc into wallet 

address *W8KA. 

d. Immediately thereafter, Defendants executed blockchain transaction *9b6a, which 

resulted in 12.972 Bitcoin transferring from wallet address *W8KA into

CoinPayments Address *uk1x (constituting the 12.467 Bitcoin received by wallet 

address *W8KA plus an additional .505 Bitcoin). 

74. While Defendants easily could have directly transferred Bitcoin from Pool 

Address *b2p5 to CoinPayments Address *uk1x—as they did with the initial 50.018 Bitcoin 

transfer—they chose instead to pay additional transaction fees to achieve the same result by 

executing the transfer in a roundabout fashion via transaction *2fcb and transaction *9b6a. 

These uneconomical transactions served no purpose other than masking Defendants’ 

misappropriation of customers’ Bitcoin via CoinPayments Address *uk1x. 

75. Defendants’ transfers of Bitcoin from Pool Address *b2p5 to CoinPayments 

Address *uk1x were only a part of Defendants’ misappropriation scheme. Throughout the 

Relevant Period, Defendants intentionally and recklessly executed numerous circuitous 

Case 1:19-cv-05631 Document 1 Filed 06/17/19 Page 24 of 36
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transactions when routing misappropriated Bitcoin from Single-Use Addresses and Pool 

Addresses to CoinPayments Address *uk1x. Defendants deliberately obfuscated their illegal 

transfers of Bitcoin into CoinPayments Address *uk1x for the purpose of concealing their fraud 

and making it more difficult for customers to track the movement of their misappropriated 

Bitcoin across the blockchain. 

76. Throughout the Relevant Period, Defendants routed misappropriated Bitcoin out 

of CoinPayments Address *uk1x and into dozens of other wallet addresses. Upon information 

and belief, Defendants then withdrew or spent customers’ misappropriated Bitcoin for 

Defendants’ own benefit. 

77. By August 23, 2017, Defendants had emptied the contents of CoinPayments 

Address *uk1x by executing blockchain transaction *80ab, which transferred the last 39.407 

Bitcoin remaining in CoinPayments Address *uk1x to 31 separate wallet addresses. During the 

Relevant Period, Defendants used CoinPayments Address *uk1x to misappropriate a total of 

5,184.659 Bitcoin from customers. 

iii. Fraudulent Ponzi Payments

78. Throughout the Relevant Period, Defendants misappropriated customers’ Bitcoin 

deposits by making Ponzi scheme-like payments to customers who requested withdrawals from 

their Control-Finance accounts. 

79. Defendants’ use of Ponzi scheme-like payments was central to Defendants’ 

fraudulent scheme. Defendants intentionally and recklessly made these payments to customers

to create the illusion that Control-Finance was profitable, to conceal Defendants’ fraud, and to 

alleviate customers’ apprehension about depositing Bitcoin with Defendants. 

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80. In addition, Defendants intentionally and recklessly made Ponzi scheme-like 

payments to Affiliates for the purpose of motivating Affiliates to represent on social media 

websites including YouTube, Facebook, Twitter, and Reddit that Defendants honored 

withdrawal requests and paid profits to Affiliates and customers. Defendants’ intent in making 

these payments was to extend and conceal their fraud and to entice prospective and existing 

customers to deposit Bitcoin with Defendants. 

81. The following transaction illustrates the process by which Defendants 

misappropriated customers’ Bitcoin deposits to satisfy account withdrawal requests: 

a. On or around September 7, 2017, Customer B.C., a U.S. resident, and the 

owner(s) of at least 58 other wallet addresses, logged into the Control-Finance 

Website and initiated Bitcoin withdrawals from their Control-Finance accounts. 

b. To satisfy the withdrawal requests, Defendants on the same day initiated 

blockchain transaction *3743, which transferred 0.617 Bitcoin from three wallet 

addresses—*N5DY, *bpxc, and *Uvdp—to wallet address *hL1M (“Ponzi 

Address *hL1M”). At all times, Defendants owned, controlled, and operated 

Ponzi Address *hL1M. 

c. Defendants obtained the 0.617 Bitcoin that Defendants transferred to Ponzi 

Address *hL1M through transaction *3743 by diverting the principal deposits of 

customers. 

d. Two hours after the 0.617 Bitcoin was received by Ponzi Address *hL1M, 

Defendants initiated blockchain transaction *d072, which emptied Ponzi Address 

*hL1m by distributing its entire balance—0.617 Bitcoin—to the 59 customers

who requested account withdrawals.

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e. Ponzi Address *hL1M has only ever performed two transactions: receiving 0.617 

Bitcoin and distributing it to the withdrawing customers. 

E. Defendants Terminate Operations

82. On or around September 10, 2017, Defendants suddenly terminated their

fraudulent scheme by shutting down the Control-Finance Website, suspending all payments to 

customers, and removing the majority of content from the Social Media Accounts. 

83. To lull customers into believing that the shutdown was temporary and that 

customers’ Bitcoin deposits with Defendants were safe, on September 11 and 12, 2017, 

Defendants falsely represented to customers via email and Facebook that Defendants’ accounts 

had been temporarily frozen, but that all customer deposits were safe and would be returned by 

the end of October or early November 2017. 

84. On September 11, 2017, Defendants used the Control-Finance Email Address to 

contact customers and assert that an unspecified “exchange” had “temporarily blocked” 

Defendants’ ability to process account withdrawal requests. The email further stated that 

Defendants’ attorneys were working to unblock Defendants’ accounts, and further that 

Defendants were “establishing an algorithm for automated processing” of payments. The email 

concluded by writing, “we guarantee that we’ll fulfill our obligations given to our customers,” 

and that Defendants would soon “continue our stable growth to high profits as we always did in 

our company.” 

85. The representations Defendants made in the September 11, 2017, email to 

customers were false and fraudulent because Defendants knew that they would not implement an 

automated payment processing algorithm, that an exchange did not block Defendants’ funds or 

accounts, that Defendants had no intention of ever returning customers’ Bitcoin deposits, that 

Case 1:19-cv-05631 Document 1 Filed 06/17/19 Page 27 of 36
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Defendants had never generated stable growth or profits for customers, and that Defendants 

misappropriated customers’ funds. 

86. On September 12, 2017, Defendants used the Control-Finance Email Address to 

contact customers and assert that Defendants’ attorneys had “received information about the 

conditions for unblocking all trading accounts of the company,” and that customers would soon 

receive the return of their Bitcoin deposits, minus any prior profit withdrawals. The email 

further stated that the Control-Finance Website “will temporarily stop working, but all customer 

databases with their payment and contact details will be stored on a separate server of the 

company . . . .” The email concluded by stating that the first customer payments were made on 

September 11, 2017, and “will continue, until the end of October.” 

87. The representations Defendants made in the September 12, 2017, email to 

customers were false and fraudulent because Defendants knew that Defendants had no intention 

of ever returning customers’ Bitcoin deposits or account balances to them, that Defendants had 

no intention of making further payments to customers, and that Defendants had no intention of 

ever resuming operations. 

88. On September 15, 2017, Defendants publicly posted Defendants’ September 12, 

2017, email message to customers on the Control-Finance Facebook page. For the reasons 

identified in paragraph 87 above, the Defendants’ Facebook post of September 15, 2017, was 

false and fraudulent. 

89. Contrary to the representations Defendants made to customers via email and 

Facebook on September 11, 12, and 15, 2017, Defendants had no intention to, and did not, 

resume operations or return customers’ Bitcoin deposits. 

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90. Defendants’ intent in sending the emails of September 11 and 12, 2017, and in 

making the Facebook post of September 15, 2017, was to lull customers into complacency by 

falsely representing that customers’ deposits were safe and that temporary technical and 

regulatory barriers had merely delayed customers’ withdrawal requests. Defendants 

intentionally and recklessly made these misrepresentations with the intent to reduce customers’ 

scrutiny of Defendants’ fraud and to afford Defendants additional time in which to complete 

their misappropriation of customers’ Bitcoin deposits. 

91. Defendants’ lulling emails of September 11 and 12, 2017, and the lulling 

Facebook post of September 15, 2017, had their desired effect. Based on these communications 

by Defendants, many customers did not expect Bitcoin refunds or payments from Defendants 

until at least the “end of October” or November 2017. 

F. Reynolds Was a Controlling Person of Control-Finance

92. At all times, Reynolds was a controlling person of Control-Finance. Reynolds 

founded and organized Control-Finance, acted as its sole Director, and registered the Internet 

domain name for the Control-Finance Website. Reynolds either directly or indirectly created 

content for the Control-Finance Website, opened wallet addresses on behalf of Control-Finance 

(including CoinPayments Address *uk1x and Ponzi Address *hL1m), operated the ControlFinance Email Address and the Social Media Accounts, and executed fraudulent blockchain 

transactions on behalf of Control-Finance.

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VI. VIOLATIONS OF THE COMMODITY EXCHANGE ACT

AND COMMISSION REGULATIONS

Count I—Fraud by Deceptive Device or Contrivance

Violations of Section 6(c)(1) of the Act and 

Regulation 180.1(a) by Defendants

93. Paragraphs 1 through 92 are re-alleged and incorporated herein by reference.

94. Section 6(c)(1) of the Act, 7 U.S.C. § 9(1) (2012), 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 by not later than 1 year after [July 

21, 2010, the date of enactment of the Dodd-Frank Wall Street 

Reform and Consumer Protection Act] . . . . 

95. Regulation 180.1(a), 17 C.F.R. § 180.1(a) (2018), provides: 

It shall be 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 material fact 

necessary in order to make the statements made not untrue or 

misleading; 

 (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. Bitcoin is encompassed within the definition of “commodity” under Section 1a(9) 

of the Act, 7 U.S.C. § 1a(9) (2012). 

97. As alleged in paragraphs 1-92 above, Defendants violated Section 6(c)(1) of the 

Act and Regulation 180.1(a) by, among other things, in connection with contracts of sale of 

Case 1:19-cv-05631 Document 1 Filed 06/17/19 Page 30 of 36
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commodities in interstate commerce, (1) using and employing, or attempting to use and employ, 

manipulative devices, schemes, or artifices to defraud; (2) making or attempting to make untrue 

or misleading statements of material fact or omitting to state or attempting to omit material facts 

necessary in order to make the statements made not untrue or misleading; and (3) engaging, or 

attempting to engage, in any act, practice, or course of business, which operates or would operate 

as a fraud or deceit upon any person, by, without limitation, the following: 

a. issuing written statements misrepresenting that Control-Finance traded

customers’ Bitcoin deposits on customers’ behalf; 

b. issuing falsified Trade Reports that reflected virtual currency trades that 

were never placed and profits that did not exist; 

c. issuing written statements misrepresenting that Control-Finance 

employed professional and specialist virtual currency traders; 

d. issuing written statements that falsely represented that Defendants 

provided customers with risk diversification, asset allocation, and 

protection from virtual currency market dislocations; 

e. issuing written statements that falsely represented that customers’ ControlFinance accounts were safe and secure;

f. issuing sham account statements and profit reports that falsely reflected 

the balances, profits, and interest held in customers’ Control-Finance 

accounts;

g. issuing written statements that falsely represented that depositing Bitcoin 

with Defendants resulted in guaranteed daily and monthly profits for 

customers; 

Case 1:19-cv-05631 Document 1 Filed 06/17/19 Page 31 of 36
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h. issuing written statements that falsely represented that Defendants’ 

Affiliate Program generated profits for Affiliates;

i. issuing written statements that falsely represented that Defendants would 

pay Control-Finance Affiliates escalating bonuses and rewards for 

referring new customers to Defendants; 

j. issuing written statements misrepresenting that Defendants would return 

customers’ principal deposits and account balances by late October or 

November 2017; 

k. misappropriating customers’ Bitcoin deposits for Defendants’ own use; 

l. misappropriating customers’ Bitcoin deposits to make Ponzi scheme-like 

payments to customers who requested account withdrawals; 

m. failing to disclose to prospective and existing customers that Defendants 

misappropriated customers’ deposits; and

n. failing to disclose to prospective and existing customers that purported 

trading profits and returns paid to certain customers were actually the 

misappropriated principal deposits of other customers. 

98. Defendants intentionally or recklessly engaged in the acts and practices alleged 

above. 

99. At all times relevant to this Complaint, Reynolds controlled Control-Finance, 

directly or indirectly, and did not act in good faith or knowingly induced, directly or indirectly, 

Control-Finance’s conduct constituting the violations of the Act and Regulations described in 

this Count. Accordingly, pursuant to Section 13(b) of the Act, 7 U.S.C. § 13c(b) (2012), 

Case 1:19-cv-05631 Document 1 Filed 06/17/19 Page 32 of 36
33 

Reynolds is liable for Control-Finance’s violations of Section 6(c)(1) of the Act and Regulation 

180.1(a). 

100. The acts, omissions, and failures of Reynolds alleged in this Complaint occurred 

within the scope of his agency, employment, or office at Control-Finance. Accordingly, ControlFinance is liable under Section 2(a)(1)(B) of the Act, 7 U.S.C. § 2(a)(1)(B) (2012), and 

Regulation 1.2, 17 C.F.R. § 1.2 (2018), as a principal for Reynolds’s acts, omissions, or failures 

in violation of Section 6(c)(1) of the Act and Regulation 180.1(a). 

101. Each act of (1) using or employing, or attempting to use or employ, a 

manipulative device, scheme, or artifice to defraud; (2) making, or attempting to make, untrue or 

misleading statements of material fact, or omitting to state material facts necessary to make the 

statements not untrue or misleading; and (3) engaging, or attempting to engage, in a fraudulent or 

deceitful act, practice, or a course of business, 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 and 

Regulation 180.1(a). 

VII. RELIEF REQUESTED

WHEREFORE, the Commission respectfully requests that the Court, as authorized by 

Section 6c of the Act, 7 U.S.C. § 13a-1 (2012), and pursuant to its equitable powers, enter: 

a. an order finding that Control-Finance and Reynolds violated Section 6(c)(1) of 

the Act, 7 U.S.C. § 9(1) (2012), and Regulation 180.1(a), 17 C.F.R. § 180.1(a) 

(2018); 

b. an order of permanent injunction prohibiting Control-Finance and Reynolds, and 

any other person or entity associated with them, from engaging in conduct that 

violates Section 6(c)(1) of the Act and Regulation 180.1(a); 

Case 1:19-cv-05631 Document 1 Filed 06/17/19 Page 33 of 36
34 

c. an order of permanent injunction enjoining Control-Finance and Reynolds and 

any other person or entity associated with them from: 

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. § 1a(40) (2012));

ii. entering into any transactions involving “commodity interests” (as that 

term is defined in Regulation 1.3, 17 C.F.R. § 1.3 (2018)), for their own 

personal account(s) or for any account in which they have a direct or 

indirect interest;

iii. having any commodity interests traded on their 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; 

v. soliciting, receiving, or accepting any funds from any person for the 

purpose of purchasing or selling any commodity interests; 

vi. applying for registration or claiming exemption from registration with the 

Commission in any capacity, and engaging in any activity requiring such 

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) (2018); 

vii. acting as a principal (as that term is defined in Regulation 3.1(a), 17 

C.F.R. § 3.1(a) (2018)), agent, or any other officer or employee of any 

person (as that term is defined in Section 1a(38) of the Act, 7 U.S.C. 

Case 1:19-cv-05631 Document 1 Filed 06/17/19 Page 34 of 36
35 

§ 1a(38) (2012)), registered, exempted from registration, or required to be 

registered with the Commission (except as provided for in Regulation 

4.14(a)(9)); 

d. an order directing Defendants, 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, as well as any successors thereof, to make full 

restitution to every person or entity whose Bitcoin they received or caused another 

person or entity to receive as a result of acts and practices that constituted 

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

f. an order directing Defendants, as well as any successors thereof, holding 

companies, and alter egos, to rescind, pursuant to such procedures as the Court 

may order, all contracts and agreements, whether implied or express, entered into 

between them and any customers whose Bitcoin were received by them as a result 

of the acts and practices which constituted violations of the Act and Regulations, 

as described herein;

g. an order directing each Defendant to pay a civil monetary penalty, to be assessed 

by the Court, in an amount not to exceed the penalty prescribed by Section 

6c(d)(1) of the Act, 7 U.S.C. § 13a-1(d)(1) (2012), as adjusted for inflation 

pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements 

Case 1:19-cv-05631 Document 1 Filed 06/17/19 Page 35 of 36
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Act of 2015, Pub. L. 114-74, 129 Stat. 584 (2015), tit. VII, § 701, and Regulation 

143.8, 17 C.F.R. § 143.8 (2018), for each violation of the Act and Regulations, as 

described herein; 

h. an order requiring Defendants to pay costs and fees as permitted by 28 U.S.C. 

§§ 1920 and 2412(a)(2) (2012); and 

i. an order providing such further relief as the Court deems just and proper. 

* * * 

Dated: June 17, 2019 Respectfully submitted,

 COMMODITY FUTURES 

TRADING COMMISSION

s/Jonah E. McCarthy 

Daniel J. Grimm (pro hac vice application to be submitted) 

Senior Trial Attorney

dgrimm@cftc.gov

Jonah E. McCarthy (S.D.N.Y. Bar No. JM1977) 

Senior Trial Attorney

jmccarthy@cftc.gov

Luke B. Marsh (pro hac vice application to be submitted) 

Chief Trial Attorney

lmarsh@cftc.gov

Paul G. Hayeck (pro hac vice application to be submitted) 

Deputy Director 

phayeck@cftc.gov 

COMMODITY FUTURES 

TRADING COMMISSION

Division of Enforcement 

1155 21st Street, N.W., Washington, DC 20581 

Telephone: (202) 418-5000 

Facsimile: (202) 818-3179 

Attorneys for Plaintiff

Case 1:19-cv-05631 Document 1 Filed 06/17/19 Page 36 of 36