A US District Court in Arizona has ruled in favor of the Commodity Futures Trading Commission (CFTC) in its case against Debiex, a crypto trading platform accused of orchestrating a multimillion-dollar fraud scheme. 

The court granted a default judgment after Debiex failed to respond to the lawsuit, finalizing a legal victory for the agency and the victims involved.

According to the court’s findings, Debiex engaged in fraudulent activities that led to at least $2.3 million in losses for customers who believed they were investing through a legitimate platform. 

The CFTC detailed how Debiex’s operators, whose identities remain unknown, used deceptive tactics to solicit customers. The scheme involved fake online relationships where representatives of the platform promised insider knowledge and significant returns on digital asset trades. 

Victims were encouraged to transfer their funds to digital wallets supposedly linked to Debiex, only to later discover that their assets had been misappropriated.

The case documents reveal that four customers transferred a total of $1.9 million in digital assets to wallets they believed belonged to the trading platform. Another customer transferred 367.304 ETH, with only a small portion returned. 

The fraud resulted in total confirmed losses exceeding $2.3 million. Despite repeated attempts to serve Debiex with legal notices, the company failed to respond, leading the court to approve the CFTC’s motion for a default judgment.

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As part of the ruling, Debiex has been ordered to repay $2,257,337.01 to defrauded customers. The court also imposed a civil monetary penalty of $221,466 on the platform. The National Futures Association (NFA) has been appointed to oversee the distribution of restitution payments to affected victims. 

In addition to financial penalties, the ruling permanently bars Debiex and its associated entities from engaging in any commodity trading activities, applying for CFTC registration, or soliciting funds for cryptocurrency investments.

The CFTC’s investigation revealed that a portion of the stolen assets was traced to an account controlled by a relief defendant, Zhang Cheng Yang. 

The court ordered that the remaining 62.94 ETH in Zhang’s digital wallet be returned to one of the defrauded customers. However, a significant portion of the stolen funds, including 304 ETH valued at $361,430 at the time of transfer, remains unaccounted for. Authorities continue their efforts to trace these missing assets using blockchain forensics.

This ruling highlights the growing regulatory crackdown on fraudulent cryptocurrency schemes. The CFTC has been actively pursuing enforcement actions against unregistered and deceptive crypto firms, leveraging its authority under the Commodity Exchange Act to protect investors. 

With increasing scrutiny from US regulators, the case against Debiex serves as a warning to other firms operating in the digital asset space without proper oversight.

Following the judgment, the NFA will begin managing the restitution process. Victims of the fraud have been granted the right to seek further enforcement of the ruling if Debiex fails to comply with the court’s order. 

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