Mosaic Exchange Ltd. and CEO Sean Michael fined $1.1M for crypto fraud. Learn about the CFTC case and investor protections.
CFTC Acts Against Mosaic Exchange
The Commodity Futures Trading Commission (CFTC) announced Monday that Mosaic Exchange Ltd. and CEO Sean Michael have been ordered to pay over $1.1 million in penalties following accusations of operating a deceptive cryptocurrency trading scheme. The U.S. District Court for the Southern District of Florida issued default judgments in late December 2024 after the CFTC’s 2023 complaint.
Fraudulent Practices and Misuse of Funds
From February 2019 to June 2021, Mosaic and Michael solicited funds from 18 customers using fabricated claims about profits, assets under management, and partnerships with crypto exchanges. The investigation revealed they misused client funds for personal expenses, including travel and dining.
Financial Penalties and Restrictions
The court’s judgment requires the defendants to pay approximately $468,600 in restitution, $60,980 in disgorgement, and a $660,000 civil penalty. Additionally, Mosaic and Michael face a permanent trading ban and are prohibited from registering with the CFTC.
Statement from the CFTC
The agency reiterated its commitment to safeguarding investors from unregistered and fraudulent operations. “Fraud involving unregistered firms offering commodity pool investments is a growing concern,” the CFTC stated, urging investors to verify firms through the National Futures Association database.
Public Awareness and Resources
The CFTC encourages individuals to report suspicious activities via its hotline or whistleblower program, which provides monetary rewards for actionable tips. This case highlights the risks of unverified investment schemes in the digital asset market.
For more information about protecting your investments, visit the CFTC’s official site. Verify firms and report fraud to stay informed about safe investment practices.
