1 

UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF FLORIDA 

CASE NO.: 9:23-cv-81320 

------------------------------------------------------ 

 : 

COMMODITY FUTURES TRADING : 

COMMISSION, : 

 : 

 Plaintiff, : 

 : 

v. : 

 : 

MOSAIC EXCHANGE LIMITED, a : 

limited liability company, : 

 : 

and : 

 : 

SEAN MICHAEL, individually and as : 

an officer of MOSAIC EXCHANGE : 

LIMITED, : 

 : 

 Defendants. : 

 : 

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COMPLAINT FOR INJUNCTIVE RELIEF, CIVIL MONETARY 

PENALTIES, RESTITUTION, AND OTHER EQUITABLE RELIEF 

UNDER THE COMMODITY EXCHANGE ACT

 Plaintiff, Commodity Futures Trading Commission (the “CFTC” or “Commission”), an 

independent federal agency, by its attorneys, alleges as follows: 

I. INTRODUCTION 

1. From approximately February 2019 to in or about June 2021 (the “Relevant 

Period”), Mosaic Exchange Limited, through its officers, agents, and employees (“Mosaic”), and 

Sean Michael directly ( “Michael,” and collectively, “Defendants”), fraudulently solicited and 

induced individuals in the United States and other countries to open accounts with and transfer 

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bitcoin (“BTC”), a digital asset commodity, or other funds to Defendants for Mosaic to trade 

futures contracts and/or swaps on, and engage in spot transactions and transactions on a 

leveraged or margined basis in, digital asset commodities on customers’ behalves through pooled 

and individual accounts. As described below, many of the transactions involving leverage or 

margin were transactions described in Section 2(c)(2)(D) of the Act, 7 U.S.C. § 2(c)(2)(D) 

(“leveraged or margined retail commodity transactions”). 

2. To induce customers and prospective customers to open accounts with Mosaic, 

Mosaic, while acting as a Commodity Pool Operator (“CPO”), and Michael, while acting as an 

Associated Person (“AP”) of a CPO, falsely represented and advertised, among other things, that 

Mosaic: (a) was a cryptocurrency trading platform with tens of millions of dollars in assets 

under management; (b) offered a Mosaic-designed proprietary trading algorithm (“Mosaic AI” or 

“algorithm”) to trade, according to Mosaic ,“futures,” “spot” and/or “leveraged” digital asset 

commodity contracts that was purportedly 82% accurate, and purportedly had profit margins at 

various times ranging from “20% [to] 60% per month” and “10% to 50+% per month”; and 

(c) had partnerships or broker agreements with certain cryptocurrency trading exchanges. 

3. In actuality, contrary to Defendants’ representations, Mosaic was not a trading 

platform with tens of millions of dollars of assets under management, Mosaic did not have the 

track record of trading profitability as represented but instead it lost money trading for 

customers, and Mosaic did not have partnership or broker agreements with the cryptocurrency 

exchanges that Defendants advertised they had. 

4. In addition, Defendants misappropriated some of the customer funds to pay for 

Michael’s restaurant and travel expenses. 

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5. As a result of Defendants’ fraudulent scheme, at least 17 persons located in the 

United States, including Florida, and other countries gave Defendants hundreds of thousands of 

dollars’ worth of BTC or other funds for Defendants to engage in trading related to BTC and 

other digital asset commodities through Mosaic on the customers’ behalves. Defendants traded 

futures contracts and/or swaps and engaged in spot and leveraged or margined retail commodity 

transactions in BTC and other digital asset commodities for many customers, and many lost most 

if not all of their money. 

6. By this conduct and the conduct further described herein, Defendants have 

engaged, are engaging, or are about to engage in fraudulent acts and practices in violation of 

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

(C), 6o(1)(A) and (B), 9(1), and Commission Regulations (“Regulations”) 4.41 and 180.1(a), 17 

C.F.R. §§ 4.41, 180.1(a) (2022).

7. At all relevant times, the acts of Michael and other Mosaic agents and employees 

were committed within the scope of their employment, agency, or office with Mosaic. 

Therefore, 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), Mosaic is liable as principal for their actions in violation of the CEA and 

Regulations. 

8. At all relevant times, Michael was the controlling person of Mosaic and 

knowingly induced the underlying violations of the CEA and Regulations or failed to act in good 

faith. Therefore, pursuant to Section 13(b) of the Act, 7 U.S.C. § 13c(b), Michael is liable as the 

controlling person for the actions of Mosaic in violation of the CEA and Regulations. 

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9. Unless permanently restrained and enjoined by this Court, Defendants are likely 

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

practices. 

10. Accordingly, pursuant to Sections 2(c)(2)(D) and 6c of the Act, 7 U.S.C. 

§§ 2(c)(2)(D) and 13a-1, the Commission brings this action to enjoin Defendants’ unlawful acts 

and practices and to compel their compliance with the Act and Regulations, and to further enjoin 

Defendants from engaging in any commodity interest or digital asset commodity related activity. 

Additionally, the Commission seeks civil monetary penalties, restitution, disgorgement of 

Defendants’ ill-gotten gains, and ancillary remedial relief, including, but not limited to, 

permanent trading and registration bans, rescission, fees and costs, pre- and post-judgment 

interest, and such equitable relief as this Court may deem necessary or appropriate. 

II. JURISDICTION AND VENUE 

11. This Court has jurisdiction pursuant to 28 U.S.C. § 1331 (federal question 

jurisdiction) and 28 U.S.C. § 1345 (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, authorizes the CFTC to seek 

injunctive relief against any person whenever it shall appear to the CFTC 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 CEA or any rule, regulation, or order thereunder. 

12. Venue properly lies with this Court pursuant to 7 U.S.C. § 13a-1(e) because 

Defendants transacted business in this District and certain acts and practices alleged in this 

Complaint occurred within this District, among other places. 

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III. THE PARTIES 

13. Plaintiff Commodity Futures Trading Commission is an independent federal 

regulatory agency charged by Congress with the administration and enforcement of the CEA and 

the Regulations promulgated thereunder. The CFTC maintains its principal office in 

Washington, D.C. 

14. Defendant Mosaic Exchange Limited registered as a limited liability company in 

Pennsylvania in May 2019. It also was registered as a Private Limited Company in the United 

Kingdom from January 2019 until in or about September 2020. Mosaic conducted business 

during the Relevant Period from Boca Raton, Florida, among other places. Mosaic has never 

been registered with the CFTC in any capacity. 

15. Defendant Sean Michael is an individual who resided during the Relevant Period 

in Boca Raton, Florida, among other places. Throughout the Relevant Period, Michael 

conducted business on behalf of Mosaic in Boca Raton, Florida, among other places. Michael 

has never been registered with the CFTC in any capacity. 

IV. Relevant Statutory Definitions and 

Derivative Liability Under the CEA and Regulations 

 A. Statutory Definitions 

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

has associated ownership or use rights. Digital assets include virtual currencies that are digital 

representations of value that function as mediums of exchange, units of account, and/or stores of 

value. Certain digital assets, including BTC and Ethereum (“ETH”), as well as other virtual 

currencies, are “commodities,” as defined under Section 1a(9) of the Act, 7 U.S.C. § 1a(9). 

17. Section 2(c)(2)(D) of the Act, 7 U.S.C. § 2(c)(2)(D), applies to any agreement, 

contract, or transaction in any commodity that is entered into with or offered to (even if not 

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entered into with) persons that are not eligible contract participants “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,” with limited exceptions not applicable here (as described 

above, “leveraged or margined retail commodity transactions”). 

18. Section 2(c)(2)(D)(iii), 7 U.S.C. § 2(c)(2)(D)(iii), provides that leveraged or 

margined retail commodity transactions are treated “as if the agreement, contract, or transaction 

was a contract of a sale of a commodity for future delivery.” 

19. An eligible contract participant (“ECP”) is, in relevant part, an individual who has 

amounts invested on a discretionary basis, the aggregate of which is in excess of $10 million, or 

$5 million if the individual enters into the transaction “in order to manage the risk associated 

with an asset owned or liability incurred, or reasonably likely to be owned or incurred, by the 

individual.” Section 1a(18)(xi) of the Act, 7 U.S.C. § 1a(18)(xi). 

20. Section 1a(11) of the Act, 7 U.S.C. § 1a(11), in relevant part, defines a CPO as: 

any person — (i) engaged in a business that is of the nature of a 

commodity pool, investment trust, syndicate, or similar form of 

enterprise, and who, in connection therewith, solicits, accepts, or 

receives from others funds, securities, or property, either directly 

or . . . otherwise, for the purpose of trading in commodity interests, 

including any — (I) commodity for future delivery [or] swap; [or] 

(II) agreement, contract, or transaction described in . . . Section 

2(c)(2)(D)(i). 

21. Regulation 1.3, 17 C.F.R. § 1.3, in relevant part, defines an AP of a CPO as any 

“partner, officer, employee, consultant, or agent (or any natural person occupying a similar status 

or performing similar functions), in any capacity which involves (i) the solicitation of funds, 

securities, or property for a participation in a commodity pool or (ii) the supervision of any 

person or persons so engaged[.]” 

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B. Provisions Authorizing Imposition of Derivative Liability Under the CEA 

and Regulations 

22. 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), provide that the “act, omission, or failure of any official, agent, or other 

person acting for . . . any corporation . . . within the scope of his employment or office, shall be 

deemed the act, omission, or failure of such . . . corporation . . . as well as such official, agent, or 

other person.” 

23. Section 13(b) of the Act, 7 U.S.C. § 13c(b), provides that any “person who, 

directly or indirectly, controls any person who has violated any provision of this chapter or any 

of the rules, regulations, or orders issued pursuant to this chapter may be held liable for such 

violation in any action brought by the Commission to the same extent as such controlled person. 

In such action, the Commission has the burden of proving that the controlling person did not act 

in good faith or knowingly induced, directly or indirectly, the acts constituting the violation.” 

V. FACTS 

A. Background 

24. Michael was Mosaic’s sole owner, its principal, and its Chief Executive Officer 

(“CEO”). 

25. Throughout the Relevant Period, Mosaic maintained a website at 

www.mosaicexchange.co. 

26. Mosaic represented on its website and in advertisements posted to the internet that 

Mosaic was a “Cryptocurrency Exchange and Trading Platform” with offices throughout the 

world, including within the United States. 

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27. Defendants represented on Mosaic’s website, in advertisements posted to the 

internet, and/or in direct communications that they would trade “futures” and engage in “spot” 

transactions and “leveraged” digital asset commodity contracts on customers’ behalves. 

28. Customers opened trading accounts with Mosaic by signing up through the 

Mosaic website. 

29. Mosaic stated in advertisements posted to the internet that customers were 

required to deposit at least one BTC with Mosaic to open a trading account. However, some 

customers were permitted to open a trading account by transferring money instead of BTC to 

Mosaic. 

30. After signing up for a trading account with Mosaic, Mosaic emailed customers a 

Mosaic account username and password and a deposit address to transfer the required BTC or 

other funds to Mosaic. The Mosaic website also provided instructions on how to transfer the 

BTC or other funds to Mosaic. 

31. During the Relevant Period, customers transferred BTC or other funds to Mosaic 

as instructed for the purpose of opening trading accounts with Mosaic. 

32. After transferring the required BTC or other funds to the account, customers, 

according to Mosaic, purportedly were able to “buy” and “sell” through the Mosaic website 

“futures” contracts, and engage in “spot” transactions as well as “leveraged” retail commodity 

transactions, in digital asset commodities such as “Bitcoin, Ethereum and other digital 

currencies, and store them securely in your personal account.” 

33. Mosaic represented on its website and in advertisements posted to the internet that 

it was connected to top cryptocurrency exchanges, including HDR Global Trading Limited (also 

known as and hereinafter, “BitMEX”), and Binance Holdings Limited and its affiliates including, 

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Binance Holdings (IE) Limited and Binance (Services) Holdings Limited, (collectively 

hereinafter, “Binance”). 

34. Mosaic claimed on its website and in advertisements posted to the internet and/or 

sent via email that its trading platform allowed customers to “leverage” their accounts through its 

partnerships with BitMEX and Binance. 

35. As detailed in Paragraphs 68-72, 75-78, and 86-90 below, during the Relevant 

Period, Mosaic opened pooled and individual accounts for customers in the name of Mosaic with 

BitMEX and Binance: 

a. At BitMEX, Mosaic opened an account in its own name, 

deposited and pooled customer BTC or other funds in that 

account, and traded on behalf of the pool (the “Mosaic 

BitMEX Pool Trading Account”). 

b. At Binance, Mosaic opened a master account in its own 

name, deposited and pooled customer BTC or other funds 

in that account, and traded through the master account 

some customer funds as a pool (the “Mosaic Master 

Binance Pool Trading Account” or “master account” and, 

together with the Mosaic BitMEX Pool Trading Account, 

the “Mosaic Pools”). 

c. At Binance, under the Mosaic master account, Mosaic also 

opened customer-specific individual sub-accounts 

containing BTC or other funds from individual customers 

(the “Mosaic Binance Subaccounts” or “subaccounts”). 

 

36. Through the Mosaic Pools and the Mosaic Binance Subaccounts, Mosaic, on 

behalf of customers, traded futures contracts and/or swaps on, and engaged in spot transactions 

and leveraged or margined retail commodity transactions in, digital asset commodities. 

37. Many of the customers on whose behalves Mosaic traded were not ECPs as 

defined in Section 1a(18)(A)(xi) of the Act, 7 U.S.C. § 1a(18)(A)(xi). 

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38. Many of the digital assets relating to the trading at issue here, including BTC and 

ETH, are commodities in interstate commerce pursuant to Section 1a(9) of the Act, 7 U.S.C. 

§ 1a(9). 

39. Many of the contracts that Mosaic calls “futures” and/or “spot” on digital asset 

commodities, including BTC and ETH, were entered into with, or offered to, non-ECPs on a 

leveraged or margined basis and did not result in actual delivery of the underlying digital asset 

commodities within 28 days. These transactions are leveraged or margined retail commodity 

transactions subject to Section 2(c)(2)(D) of the Act, 7 U.S.C. § 2(c)(2)(D). 

40. Mosaic, through Michael, controlled the trading in the Mosaic Pools and the 

Mosaic Binance Subaccounts. 

41. Defendants ultimately decided for one or more customers and/or brokers when to 

buy, when to sell, when to leverage, and when to hold contacts in BTC, ETH or other digital 

asset commodities, and executed trades for customers and/or brokers through the Mosaic Pools 

and the Mosaic Binance Subaccounts. 

42. Mosaic represented in advertisements posted to the internet and/or sent via email 

that customers would be charged fees for trading through Mosaic, and charged commissions on 

profitable trades. 

B. Defendants’ False or Misleading Solicitations 

43. Throughout the Relevant Period, Mosaic, through its agents and employees, and 

Michael directly, advertised its business and solicited customers, prospective customers, brokers 

and prospective brokers through its website, on social media platforms, on internet job posting 

boards, and through email, telephone calls, in-person and other direct communications with 

customers, prospective customers, brokers and prospective brokers. 

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44. To induce customers, prospective customers, brokers and prospective brokers to 

open trading accounts with and transfer BTC or other funds to Mosaic, Defendants 

misrepresented in their advertisements and solicitations, among other things, that Mosaic 

purportedly had tens of millions of dollars in assets under management; had an algorithm that, 

among other things, purportedly had profit margins at various times ranging from “20% [to] 60% 

per month” and “10% to 50+% per month” or more; and had partnerships with BitMEX and 

Binance, and a broker agreement with Binance. 

45. During the Relevant Period, Mosaic, through its agents and employees, and 

Michael directly, solicited at least 17 persons, at least 10 of whom were located in the United 

States, including in Florida, to deposit hundreds of thousands of dollars’ worth of BTC or fiat 

currency with Defendants for Defendants to engage in trading related to BTC, ETH, or other 

digital asset commodities through Mosaic on the customers’ behalves. As described in 

Paragraphs 65, 80-81, and 92-97 below, a number of customers lost all of the funds they 

transferred to Mosaic for Mosaic to trade digital asset commodities on their behalves. 

i. Defendants’ Misrepresentations Concerning Assets Under 

Management 

46. Mosaic claimed in advertisements posted to the internet and/or sent via email that 

it had anywhere from $30 million to $120 million assets under management. For example, 

a. Mosaic claimed in a July 10, 2019 article written by 

Michael and posted on the internet through a hyperlink to 

Mosaic’s Facebook.com webpage, entitled “Mosaic AI 

Machine Learning Bitcoin Leverage Trading with 

Bit[MEX], and Binance” (hereinafter, “the July 2019 

article”), that Mosaic “[c]urrently . . . has 120 million in 

assets under management working in 32 countries with 

Fiat/BTC onboarding.” 

 

b. Mosaic claimed in a Glassdoor advertisement available on 

the internet in or about November 2019 that “currently we 

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have 30 million in assets under management projected to 

50 million by years end.” 

47. These claims were false. Mosaic did not have $30 million to $120 million in 

assets under management at BitMEX and Binance. Indeed, during the Relevant Period, customer 

funds under management by Defendants at BitMEX and Binance combined totaled less than 

$700,000.

ii. Defendants’ Misrepresentations and Material Omissions Regarding 

Profits and the Mosaic Algorithm 

48. Mosaic’s advertisements and website claimed that, by signing up with Mosaic, 

Mosaic would trade BTC and other digital asset commodities for customers using an algorithm 

designed by Michael, called Mosaic “Einstein AI” or “Mosaic AI.” 

49. A July 2019 article written by Michael and posted through a hyperlink to 

Mosaic’s Facebook.com webpage claimed that once a customer signed up with Mosaic, funded 

his or her account, and followed the link to BitMEX and/or Binance, Mosaic’s “profit margins 

range[d] from 50% per month up to 300+%.” 

50. In addition to website and internet advertisements, Defendants touted Mosaic’s 

supposed profitability to customers and prospective customers in emails, telephone calls and/or 

in-person communications. For example, beginning in or about February 2020, a prospective 

customer was told in various telephone calls by Mosaic through its agents and employees, 

including Michael, that the Mosaic AI historically had provided about 20% monthly profits. 

Based in part upon these representations, the customer opened an account with and transferred 

BTC to Mosaic. Thereafter, on or about February 13, 2020, this customer received an email 

from Defendants stating that, with respect to a Binance account: “You are now live with Mosaic 

AI trading your funds on average 20%-60% profit per month.” 

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51. As part of their fraudulent scheme, Mosaic and Michael recruited a number of 

Mosaic customers by first inducing them to become Mosaic “brokers.” 

52. To do so, Mosaic placed various job advertisements during the Relevant Period 

for Mosaic “cryptocurrency broker” positions through internet job posting boards like Glassdoor 

and LinkedIn. 

53. For example, during the summer of 2019 and again in November 2019, Mosaic 

listed job postings on the internet for “cryptocurrency broker.” The postings stated, among other 

things, that 

a. Mosaic traded using the Mosaic AI algorithm that was 82% 

accurate; and 

b. “Our AI software algorithm, risk management software and 

top traders monitoring the market are seeing minimum 

monthly ROI [return on investment] of 20%. 

54. The postings also stated that, to become a broker with Mosaic, each broker was 

required to invest at least one BTC with Mosaic and that the average investment was five BTC. 

55. During the Relevant Period, a number of persons agreed to be hired as Mosaic 

brokers based upon Defendants’ representations about Mosaic AI, customers’ ability to use 

leverage to trade, and Mosaic’s purported history of profitable trading, among other things. One 

or more of these brokers then opened trading accounts with Mosaic, and at least one transferred 

their personal BTC or other funds to Mosaic. 

56. After hiring brokers, Defendants continued to tout the Mosaic AI’s supposed 

profitability to its brokerage staff. For example, after being hired as a broker by Mosaic, one 

person received an email on January 9, 2020, from a Mosaic employee stating “[g]lad to have 

you on board” and providing instructions on how to recommend Mosaic to prospective 

customers: 

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Recommending Mosaic is pretty simple. If you were to think 

about how you just recommend something you thought was really 

interesting, it’s the same thought process with Mosaic. “Did you 

hear about Mosaic yet, yeah they act as a digital asset hedge fund 

that allows their Clients to Copy-Trade professional AI strategies 

and collect 80% of the profits in their accounts automatically. 

They win about 75+% of their trades and return a baseline of 15% 

to 20%+monthly. I’ve had an account with them for 30, 60, 90 

days. I’d be happy to email/show you my results.[”] 

That’s the basic conservational talk track. If they want more info 

link them to our Twitter for recent trades. . . . Mosaic historically 

returns 15%-20% + monthly, while mitigating risk with trailing 

stops and trailing profits, insurance trades, tight money % trade 

management and deep liquidity, with a running win rate above 

75%. 

57. Another customer – after becoming a Mosaic broker, opening a Mosaic account, 

and transferring BTC to Mosaic – received an email on February 13, 2020 from Michael stating, 

among other things, “You are now live with Mosaic AI trading your funds on average 20%-60% 

profit per month.” Thereafter, on April 8, 2020, a Mosaic employee emailed the same customer 

a marketing document stating, among other things, that Mosaic had “profit margins range from 

10% per month up to 50+%.” 

58. Mosaic did not generate profits or “win” rates as represented in Paragraph 56 

above based upon the trading identified in Paragraphs 80-81, 92, and 94-96 below. 

59. Additionally, during the Relevant Period, to further induce one or more 

customers, prospective customers, brokers, or prospective brokers to open accounts with Mosaic, 

Defendants sent via email or otherwise showed them documents purporting to show Mosaic’s 

actual performance trading related to digital asset commodities. 

60. One such document, which purported to show Mosaic’s daily trading performance 

during the period from January to March 2019, showed that Mosaic predominately profited 

during daily trading on BitMEX. Defendants represented to one or more customer, prospective 

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customer, broker or prospective broker that the document showed Mosaic’s actual results trading 

through “leverage” in connection with digital asset commodities on BitMEX during the threemonth period. 

61. In fact, however, these profit representations were hypothetical projections, and 

not actual trading results. 

62. Defendants knew the profit representations were hypothetical projections and not 

actual results, but failed to disclose that fact to one or more customer, prospective customer, 

broker or prospective broker. 

63. Similarly, Defendants sent to one or more customer, prospective customer, broker 

or prospective broker, what purported to be Mosaic’s trading results on BitMEX for the period 

November to December 2019. That document claimed a “success rate” of between 64.29% to 

78.95%. Defendants represented to one or more customers, prospective customers, brokers 

and/or prospective brokers that the document showed Mosaic’s actual results from such trading 

on BitMEX during the two-month period, including in futures contracts. 

64. In fact, however, in November 2019, Mosaic had a realized loss of approximately 

$4,800 trading contracts on digital asset commodities on BitMEX, and in December 2019, 

Mosaic did no trading on BitMEX at all. 

65. On information and belief, the Mosaic algorithm never consistently worked, never 

generated the represented profits, and ultimately was abandoned by Defendants. Indeed, a 

number of customers lost all of the funds they transferred to Mosaic for Mosaic to engage in 

trading relating to digital asset commodities on their behalves. 

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iii. Defendants Misrepresentations Regarding Their Partnership and/or 

Broker Agreements with BitMEX and/or Binance 

66. Mosaic also touted on its website, in its internet advertisements, and in direct 

communications with customers and prospective customers that it had a “partnership” with 

BitMEX and Binance and was a broker for Binance. 

67. Mosaic, however, never had a partnership or broker agreement with Binance. Nor 

did it have a partnership agreement with BitMEX. 

 C. The Mosaic Pooled and Individual Trading Accounts 

68. To fund their Mosaic accounts for trading, Mosaic customers electronically 

transferred their BTC and/or other funds to a Mosaic bank or Coinpayment account, or a Mosaic 

trading account at BitMEX and/or Binance. At least one Mosaic customer wrote a check payable 

to Michael, and Michael deposited it into his personal bank account. 

69. Once received, Defendants electronically transferred some or all of the customer’s 

BTC or other funds from the Mosaic corporate bank or Coinpayment accounts and/or Michael’s 

personal bank account to one or more of the following accounts: 

a. A Mosaic pooled account at Gemini Trust Company, LLC 

(“Gemini”) (“Mosaic Gemini Pool Account”). 

b. The Mosaic BitMEX Pool Trading Account. 

c. The Mosaic Master Binance Pool Trading Account. 

 

d. The Mosaic Binance Subaccounts created under the Mosaic 

Master Binance Pool Trading Account. 

e. Michael’s personal Gemini account. 

70. During the Relevant Period, Defendants transferred customer funds from the 

Mosaic Gemini Pool Account to the Mosaic BitMEX Pool Trading Account, the Mosaic Master 

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Binance Pool Trading Account, two of the Mosaic Binance Subaccounts and/or the Mosaic 

corporate bank account. 

71. Additionally, at least two customers deposited funds directly into Mosaic Binance 

Subaccounts.

72. Michael did not transfer all of the customer funds received into the Mosaic 

corporate bank account or his personal bank account into the accounts listed in Paragraphs 69.b., 

69.c., or 69.d. above, but rather used the money, in part, to pay for personal expenditures such as 

hotels and restaurants. 

i. The Mosaic BitMEX Pool Trading Account 

73. During the Relevant Period, BitMEX operated a trading platform for the trading 

of futures, options, swaps, spot market transactions, and leveraged or margined retail 

commodity transactions involving various digital asset commodities, including BTC and ETH, 

including for persons in the United States. 

74. During the Relevant Period, BitMEX offered leveraged or margined trading of 

digital asset commodities to retail non-ECPs, and other market participants, through its website, 

including those located in the United States. 

75. In or about late February 2019, Michael opened the Mosaic BitMEX Pool Trading 

Account in Mosaic’s name to engage in trading related to BTC and other digital asset 

commodities for Mosaic’s customers. 

76. During the Relevant Period, from the Mosaic BitMEX Pool Trading Account, 

customer funds were traded as part of a pool. 

77. During the Relevant Period, Defendants executed trades for the Mosaic BitMEX 

Pool Trading Account. 

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78. Through that Mosaic BitMEX Pool Trading Account, Defendants traded futures 

contracts and/or swaps on, and likely also engaged in spot and/or leveraged or margined retail 

commodity transactions in, digital asset commodities. 

79. During the period February 2019 through January 2020, Defendants deposited 

approximately 36.4 BTC – valued in U.S. dollars as approximately $323,284 at the time of the 

deposit – into the Mosaic BitMEX Pool Trading Account. The majority of the funds were 

transferred to BitMEX from the Mosaic Gemini Pool Account, the Mosaic Master Binance Pool 

Trading Account, and the Michael’s personal Gemini account. 

80. Throughout the lifetime of the account, the Mosaic BitMEX Pool Trading 

Account never realized a profit from the trading, but instead lost money in every month of the 

account’s existence. Ultimately, the Mosaic BitMEX Pool Trading Account realized a total loss 

over the account’s lifetime of approximately 30 BTC, valued in U.S. dollars as approximately 

$314,000. 

81. Defendants trading on customers’ behalves through the Mosaic BitMEX Pool 

Trading Account did not generate trading profits as represented; rather, Defendants’ trading 

resulted in the loss of almost the entire amount used to fund the Mosaic BitMEX Pool Trading 

Account. 

82. On top of the losses, Michael withdrew approximately 6.4 BTC from the Mosaic 

BitMEX Pool Trading Account over the account’s lifetime. On information and belief, 

Defendants did not return all of that money to Mosaic’s customers, but rather withdrew the 

majority to fund the Michael personal Gemini account. 

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ii. The Mosaic Master Binance Pool Trading Account and the Mosaic 

Binance Subaccounts 

83. During the Relevant Period, Binance operated a trading platform for the trading of 

futures, options, swaps, spot market commodity, and leveraged or margined retail commodity 

transactions, including BTC and ETH, including for persons in the United States. 

84. Beginning in or around September 2019, Binance offered both quarterly futures 

contracts, which are futures contracts, and perpetual contracts, which are swaps. 

85. Beginning in July 2019, Binance offered leveraged or margined trading of digital 

asset commodities to non-ECPs and other market participants, through its website, including 

those located in the United States. 

86. In or about February 2019, Michael opened the Mosaic Master Binance Pool 

Trading Account in Mosaic’s name to engage in trading related to BTC and other digital asset 

commodities for Mosaic’s customers. Under the Mosaic Binance Master Trading Account, 

Mosaic and Michael created “subaccounts” in the name of certain Mosaic customers. 

87. As the master account holder, Defendants could (i) manage the permissions of the 

subaccounts, including freezing the subaccounts or changing account passwords; and (ii) execute 

trades for the subaccount holders. 

88. During the Relevant Period, Defendants executed trades for the Mosaic Master 

Binance Pool Trading Account and for the Mosaic Binance Subaccounts. 

89. Through the Mosaic Master Binance Pool Trading Account, Defendants traded 

futures contracts and/or swaps on, as well as engaged in spot and leveraged or margined retail 

commodity transactions in, digital asset commodities. 

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90. Through the Mosaic Binance Subaccounts, Defendants traded futures contracts 

and/or swaps on, and engaged in spot and/or leveraged or margined retail commodity 

transactions in, digital asset commodities. 

91. Throughout the Relevant Period, Defendants deposited into the Mosaic Master 

Binance Pool Trading Account digital asset commodities valued at more than $372,000. 

92. From the Mosaic Master Binance Pool Trading Account, throughout the Relevant 

Period, Defendants transferred funds valued at approximately $101,000, including customer 

funds, to the Mosaic BitMEX Pool Trading Account. Defendants then used those funds to trade 

futures contracts and/or swaps, and likely engaged in leveraged or margined retail commodity 

transactions, involving BTC and other digital asset commodities as a pool through the Mosaic 

BitMEX Pool Account. As stated in Paragraphs 80-81 above, the Mosaic BitMEX Pool Trading 

Account never realized a profit from the trading, but instead lost money in every month of the 

account’s existence. 

93. From the Mosaic Master Binance Pool Account, during the Relevant Period, 

Defendants also transferred customer funds valued at approximately $139,000 to the Mosaic 

Binance Subaccounts. Defendants used those funds to trade futures contracts and/or swaps, as 

well as in spot and leveraged or margined retail commodity transactions, in BTC and other 

digital asset commodities through the subaccounts for the individual customer subaccount 

holders. 

94. With respect to Defendants trading in futures contracts and spot transactions on 

digital asset commodities for the Mosaic Binance Subaccounts, while there were small profits in 

a few isolated months, Defendants lost money in every other month trading those products. 

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Accordingly, Defendants’ trading in those products for customers through the Mosaic Binance 

Subaccounts did not result in the trading profits Defendants represented. 

95. With respect to Defendants’ engaging in other leveraged or margined transactions 

on digital asset commodities through the Mosaic Binance Subaccounts, on information and 

belief, Defendants’ trading in those products similarly did not result in the trading profits 

represented, particularly given that the majority of trading in the subaccounts was conducted 

over a short period of time and the subaccounts ultimately showed a zero balance. 

96. Finally, Defendants traded futures contracts and/or swaps on digital asset 

commodities on behalf of the pool through the Mosaic Master Binance Pool Trading Account. 

Defendants traded those products on behalf of the pool or the Master Binance Pool Trading from 

December 2019 through January 2020 and March 2020 through November 2020, for a total of 

eleven months. While there were small profits in four of those months, Defendants lost money 

trading futures contracts and/or swaps in every other month. Accordingly, Defendants’ trading 

in those products on behalf of the pool did not result in the trading profits represented. 

97. Defendants also engaged in spot and leveraged or margined transaction in digital 

asset commodities on behalf of the pool through the Mosaic Master Binance Pool Trading 

Account. With respect to those products, given the trading losses described in Paragraphs 80-81, 

92 and 94-96 above, and on information and belief, Defendants’ trading similarly did not result 

in the trading profits represented. 

D. Michael Controlled Mosaic and Solicited and Supervised the Solicitation of 

Funds to Engage in Trading Related to Digital Asset Commodities 

98. During the Relevant Period, Michael was the sole owner of Mosaic and CEO; was 

in charge of Mosaic’s operations; and recruited, hired and supervised staff, including staff 

located in the United States. 

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99. During the Relevant Period, on information and belief, Michael prepared 

Mosaic’s job postings and advertisements and other promotional material, and controlled the 

content on Mosaic’s website. 

100. During the Relevant Period, Michael opened and was the sole signatory to 

Mosaic’s bank and other financial accounts located in the United States. Michael had the 

authority to direct deposits into, and payments and transfers from those accounts. 

101. During the Relevant Period, Michael opened and, on information and belief, had 

control over Mosaic bank and other financial accounts into which customer funds were deposited 

for Mosaic to engage in trading related to digital asset commodity on their behalves. 

102. During the Relevant Period, Michael solicited customers, prospective customers, 

brokers, and prospective brokers, including some located in the United States, to open trading 

accounts with Mosaic and to deposit BTC and other funds with Mosaic for Mosaic to engage in 

trading related to digital asset commodities on their behalves. 

103. During the Relevant Period, Michael supervised one or more Mosaic agents and 

employees in their solicitation of customers, prospective customers, brokers, and prospective 

brokers, including some located in the United States, to open trading accounts with Mosaic and 

to deposit BTC and other funds with Mosaic for Mosaic to engage in trading related to digital 

asset commodities on their behalves. 

104. Funds solicited by Michael directly, and/or by Mosaic agents and employees 

supervised by him, included funds that were traded through Mosaic pool accounts at BitMEX 

and Binance, and/or Mosaic-created customer Binance subaccounts. 

105. During the Relevant Period, Michael opened trading accounts in the name of 

Mosaic at Binance and BitMEX through which he traded customer funds. In addition, at 

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Binance, Michael opened subaccounts for customers under the Mosaic Binance Master Pool 

Trading Account, and traded customer funds through both the master and subaccounts. 

E. Florida Long-Arm Jurisdiction for Service of Process Purposes 

106. During the Relevant Period and for purposes of Florida Statute § 48.181, Mosaic 

operated, conducted, engaged in, or carried on a business or business venture in the state of 

Florida, or had an office or agency in the state of Florida, insofar as it solicited at least one 

customer who resided in Florida, listed a business address in Florida, accepted customer funds in 

Florida, and owned at least one bank account which held customer funds in Florida. 

107. For purposes under Florida Statute § 48.181, Mosaic is a nonresident foreign 

corporation insofar as it is a limited liability corporation that was incorporated in the state of 

Pennsylvania. 

108. During the Relevant Period and for purposes of Florida Statute § 48.181, Michael 

operated, conducted, engaged in, or carried on a business or business venture in the state of 

Florida, or had an office or agency in the state of Florida, insofar as he solicited at least one 

customer who resided in Florida, listed a business address in Florida, accepted customer funds in 

Florida, and owned at least one bank account which held customer funds in Florida. 

109. For purposes of Florida Statute § 48.181, Michael is either a resident of Florida 

who subsequently became a nonresident, or a resident concealing his whereabout. 

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VI. VIOLATIONS OF THE COMMODITY EXCHANGE ACT 

AND CFTC REGULATIONS 

COUNT ONE 

Violations of 7 U.S.C. § 6b(a)(2)(A) and (C) 

Fraud in Connection with Futures and/or Swaps 

110. Paragraphs 1 through 109 of this Complaint are re-alleged and incorporated 

herein by reference. 

111. As part of the conduct described herein, Defendants traded contracts of sale of 

commodities for future delivery and/or swaps for or on behalf of their customers. 

112. Separately, as part of the conduct described herein, Defendants entered into 

agreements, contracts, or transactions in digital asset commodities that were entered into with, or 

offered to, non-ECPs on a leveraged or margined basis, as described in 7 U.S.C. § 2(c)(2)(D)(i), 

and which are not subject to the exemptions set for in 7 U.S.C. § 2(c)(2)(D)(ii) (as described 

above, “leveraged or margined retail commodity transactions”). 

113. Section 4b of the Act, 7 U.S.C. § 6b, applies to such leveraged or margined retail 

commodity transactions “as if the agreement, contract, or transaction was a contract of a sale of a 

commodity for future delivery.” Section 2(c)(2)(D)(iii), 7 U.S.C. § 2(c)(2)(D)(iii). 

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

unlawful “for 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;” or 

“(C) willfully to deceive or attempt to deceive the other person by any means whatsoever in 

regard to any order or contract[.]” 

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115. During the Relevant Period, Defendants violated 7 U.S.C. 

§ 6b(a)(2)(A) and (C), by: 

a. Making material misrepresentations on the Mosaic 

website, in advertisements posted to the internet, and/or in 

electronic and other direct communications, including: 

i. That Mosaic had $30 million to $120 million in 

assets under management; 

ii. That Mosaic had historically earned specific 

monthly profits and that the Mosaic algorithm had 

specific “win” rates; and/or 

iii. That Mosaic had a partnership agreement with 

BitMEX and/or Binance and a broker agreement 

with Binance. 

b. Omitting and failing to disclose material facts concerning 

Mosaic’s history of trading digital asset commodities and 

related products, including that the profit and win rate 

history trading digital asset commodities and related 

products as represented in Paragraphs 56-63 either never 

occurred or were hypothetical trading projections and not 

actual trading results; and 

c. Misappropriating some customer funds to pay for personal 

expenses, such to pay for, at least in part, Michael’s 

restaurant and travel expenses. 

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116. Each and every material misrepresentation and omission by Defendants, including 

but not limited to those specifically alleged herein, was made with the knowledge that, or made 

with reckless disregard of the fact that, it was false or misleading. 

117. The foregoing acts, omissions, and failures of Mosaic employees and agents, 

including Michael, occurred within the scope of their employment, office, or agency with 

Mosaic; therefore, 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), Mosaic is liable for these acts, omissions, and failures 

and for its employees and agents’ violations of 7 U.S.C. § 6b(a)(2)(A) and (C). 

118. Michael directly and indirectly controlled Mosaic and did not act in good faith or 

knowingly induced the acts constituting Mosaic’s violations, and is therefore liable, pursuant to 

Section 13(b) of the Act, 7 U.S.C. § 13c(b), for Mosaic’s violations of 7 U.S.C. § 6b(a)(2)(A) 

and (C). 

119. Each material misrepresentation, material omission, or act of misappropriation 

made by Defendants, including but not limited to those specifically alleged herein, constitutes a 

separate and distinct violation of 7 U.S.C. § 6b(a)(2)(A) and (C). 

COUNT TWO 

Violations of 7 U.S.C. § 6o and 17 C.F.R. § 4.41 

Fraud by a Commodity Pool Operator 

And an Associated Person of a Commodity Pool Operator 

120. Paragraphs 1 through 109 of this Complaint are re-alleged and incorporated 

herein by reference. 

121. As part of the conduct described herein, Defendants traded contracts of sale of 

commodities for future delivery and/or swaps for or on behalf of their customers. 

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122. Separately, as part of the conduct described herein, Defendants entered into 

agreements, contracts, or transactions in digital asset commodities that were entered into with, or 

offered to, non-ECPs on a leveraged or margined basis, as described in 7 U.S.C. § 2(c)(2)(D)(i), 

and which are not subject to the exceptions set forth in 7 U.S.C. § 2(c)(2)(D)(ii) (as described 

above, “leveraged or margined retail commodity transactions.” 

123. During the Relevant Period, Mosaic acted as a CPO, as defined in Section 1a(11) 

of the Act, 7 U.S.C. § 1a(11), and Michael acted as an AP of a CPO, as defined in Regulation 

1.3, 17 C.F.R. § 1.3, by soliciting and accepting funds from others for the purpose of 

participating in a pool which traded futures contracts and/or swaps, and leveraged or margined 

retail commodity transactions subject to Section 2(c)(2)(D)(i) of the Act, 7 U.S.C. § 

2(c)(2)(D)(i). 

124. Section 4o(1) of the Act, 7 U.S.C. § 6o(1) provides in relevant part that: 

It shall be unlawful for a commodity trading advisor, associated 

person of a commodity trading advisor, commodity pool operator, 

or associated person of a commodity pool operator, by use of the 

mails or any means or instrumentality of interstate commerce, 

directly or indirectly—(A) to employ any device, scheme, or 

artifice to defraud any client or participant or prospective client or 

participant; or (B) to engage in any transaction, practice, or course 

of business which operates as a fraud or deceit upon any client or 

participant or prospective client or participant. 

125. Regulation 4.41(a), 17 C.F.R. § 4.41(a) (2022), provides in relevant part that no 

CPO or principal thereof “may advertise in a manner which: (1) Employs any device, scheme or 

artifice to defraud any participant or client or prospective participant or client; [or] (2) Involves 

any transaction, practice or course of business which operates as a fraud or deceit upon any 

participant or client or any prospective participant or client[.]” 

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126. During the Relevant Period, Mosaic, acting as a CPO, under Michael’s direction, 

and Michael, acting as an AP of the CPO, through the use of the mails or other means or 

instrumentality of interstate commerce, violated 7 U.S.C. § 6o(1)(A) and (B) and 17 C.F.R. 

§ 4.41(a)(1) and (2), by making the material misrepresentations, omitting and failing to disclose 

the material facts, and engaging in the acts of misappropriation set forth in Paragraph 115 of 

Count I. 

127. Each and every material misrepresentation and omission by Defendants including 

but not limited to those specifically alleged herein, was made with the knowledge that, or made 

with reckless disregard of the fact that, it was false or misleading. 

128. The foregoing acts, omissions, and failures of Mosaic employees and agents, 

including Michael, occurred within the scope of their employment, office, or agency with 

Mosaic; therefore, 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), Mosaic is liable for these acts, omissions, and failures 

and for its employees and agents’ violation of 7 U.S.C. § 6o(1)(A) and (B), and 17 C.F.R. 

§ 4.41(a)(1) and (2). 

129. Michael directly and indirectly controlled Mosaic and did not act in good faith or 

knowingly induced the acts constituting Mosaic’s violations, and is therefore liable, pursuant to 

Section 13(b) of the Act, 7 U.S.C. § 13c(b), for Mosaic’s violations of 7 U.S.C. § 6o(1)(A) and 

(B), and 17 C.F.R. § 4.41(a)(1) and (2). 

130. Each material misrepresentation, material omission, act of misappropriation, or 

false advertisement made by Defendants, including but not limited to those specifically alleged 

herein, constitutes a separate and distinct violation of 7 U.S.C. § 6o(1)(A) and (B), and 17 C.F.R. 

§ 4.41(a)(1) and (2). 

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COUNT THREE 

Violations of 7 U.S.C. § 9(1) and 17 C.F.R. § 180.1(a) 

Commodity Fraud – Deceptive Device or Contrivance; Fraudulent Scheme 

131. Paragraphs 1 through 109 of this Complaint are re-alleged and incorporated 

herein by reference. 

132. Section 6(c) of the Act, 7 U.S.C. § 9(1), provides in relevant part: 

It shall be unlawful for any person, directly or indirectly, to 

use or employ, or attempt to use or employ, in connection 

with any swap, or 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 . . . . 

133. 17 C.F.R. § 180.1(a) (2022) provides in relevant part: 

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; [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 . . . . 

134. The digital assets, including BTC, at issue here are commodities in interstate 

commerce pursuant to Section 1a(9) of the Act, 7 U.S.C. § 1a(9). 

135. Defendants traded swaps for the benefit of their customers. 

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136. During the Relevant Period, in connection with a swap, and/or a contract of sale 

of any commodity in interstate commerce (i.e., the non-leveraged spot contracts on digital asset 

commodities, including BTC, that the Defendants traded), Defendants intentionally or recklessly 

(i) used or employed, or attempted to use or employ, manipulative or deceptive devices or 

contrivances; (ii) made or attempted to make untrue or misleading statements of material fact or 

omitted to state a material fact; and/or (iii) engaged or attempted to engage in an act, practice, or 

course of business, which operated or would operate as a fraud or deceit upon any person, in 

violation of 7 U.S.C. § 9(1), and 17 C.F.R. § 180.1(a), by making the material 

misrepresentations, omitting and failing to disclose the material facts, and engaging in the acts of 

misappropriation set forth in Paragraph 115 of Count I. 

137. Each and every scheme or artifice to defraud, misrepresentation and omission, 

and acts, practices, or courses of business which operated as a fraud and deceit upon customers, 

prospective customers, brokers and prospective brokers by Defendants (by and through their 

employees and agents) including but not limited to those specifically alleged herein, was made 

with the knowledge that, or made with reckless disregard of the fact that, it was false or 

misleading. 

138. The foregoing acts, omissions, and failures of Mosaic’s employees and agents, 

including Michael, occurred within the scope of their employment, office, or agency with 

Mosaic; therefore, pursuant to 7 U.S.C. § 2(a)(1)(B) and 17 C.F.R. § 1.2, Mosaic is liable for 

these acts, omissions, and failures and for its employees and agents’ violation of 7 U.S.C. § 9(1) 

and 17 C.F.R. § 180.1(a). 

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139. Michael directly and indirectly controlled Mosaic and did not act in good faith or 

knowingly induced the acts constituting Mosaic’s violations, and is therefore liable, pursuant to 7 

U.S.C. § 13c(b), for Mosaic’s violations of 7 U.S.C. § 9(1) and 17 C.F.R. § 180.1(a). 

140. Each scheme or artifice to defraud, material misrepresentation or omission, acts, 

practices, or courses of business which operated as a fraud and deceit upon customers, act of 

misappropriation, and false advertising by Defendants, including, but not limited to those 

specifically alleged herein, constitutes a separate and distinct violation of 7 U.S.C. § 9(1) and 17 

C.F.R. § 180.1(a). 

VII. RELIEF REQUESTED 

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

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

A. An order finding Defendants violated Sections 4b(a)(2)(A) and (C), 4o(1)(A) and 

(B), 6(c)(1), 7 U.S.C. §§ 6(a), 6b(a)(2)(A) and (C), 6o(1)(A) and (B), 9(1), and Regulations 

4.41(b) and 180.1(a), 17 C.F.R. §§ 4.41(b) and 180.1(a) (2022); 

B. An order of permanent injunction prohibiting Defendants, and any other person or 

entity associated with them, from engaging in conduct in violation of 7 U.S.C. §§ 6b(a)(2)(A) 

and (C), 6o(1)(A) and (B), and 9(1), and 17 C.F.R. §§ 4.41(b) and 180.1(a); 

 D. An order of permanent injunction prohibiting Defendants, and any of their agents, 

servants, employees, assigns, attorneys, and persons in active concert or participation with any 

one Defendant, including any successor thereof, 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. § 1a(40)); 

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

Case 9:23-cv-81320-AMC Document 1 Entered on FLSD Docket 09/26/2023 Page 31 of 34
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is defined in Regulation 1.3, 17 C.F.R. § 1.3 (2022)) or digital asset 

commodities (as described herein), including BTC and ETH, for Defendants’ 

accounts or for any account in which they have a direct or indirect interest; 

iii. Having any commodity interest or digital asset commodity, including BTC 

and ETH traded on Defendants’ 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 

BTC and ETH; 

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 BTC and ETH; 

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 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) (2022). 

E. An order requiring Defendants and any third-party transferee and/or successors 

thereof, to disgorge, pursuant to such procedure as the Court may order, all benefits received 

including, but not limited to, salaries, commissions, loans, fees, revenues and trading profits 

Case 9:23-cv-81320-AMC Document 1 Entered on FLSD Docket 09/26/2023 Page 32 of 34
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derived, directly or indirectly, from acts or practices with constitute violations of the Act and 

Regulations as described herein, including pre-judgment and post-judgment interest; 

F. An order directing Defendants and any successors thereof, 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 of the Customers whose funds were received by 

Defendants as a result of the acts and practices that constitute violations of the Act and 

Regulations as described herein; 

G. An order requiring Defendants as well as any successors thereof, to make full 

restitution to every person who has sustained losses proximately caused by the violations 

described herein, including pre-judgment and post-judgment interest; 

H. An order directing Defendants to pay a civil monetary penalty 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), as adjusted for inflation pursuant to the Federal Civil Penalties Inflation 

Adjustment Act Improvements Act of 2015, Pub. L. No. 114-74, tit. VII, § 701, 129 Stat. 584, 

599-600, 84 Fed. Reg. 3103 (Feb. 11, 2019) (to be codified at 17 C.F.R. § 143.8), or subsequent 

annually adjusted amounts, for each violation of the Act and Regulations, as described herein; 

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

§§ 1920 and 2412(a)(2); and 

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J. Enter an order providing such other and further relief as this Court may deem 

necessary and appropriate under the circumstances. 

September 26, 2023 Respectfully Submitted, 

COMMODITY FUTURES TRADING COMMISSION

________________________

Kathleen Banar

Chief Trial Attorney with the Division of 

Enforcement

Special Florida Bar No. A5500984 

E-mail: kbanar@cftc.gov 

1155 21st Street, NW 

Washington, D.C. 20581

Telephone: (202) 418-5335 

Facsimile: (202) 418-5523 

Steven Kim 

Senior Trial Attorney with the Division of 

Enforcement

Special Florida Bar No. A5501162 

E-mail: skim@cftc.gov 

1155 21st Street, NW 

Washington, D.C. 20581

Telephone: (202) 418-5040 

Facsimile: (202) 418-5523 

Attorneys for Plaintiff

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