CFTC Sues Pastor Accused of Promoting $6 Million Crypto Ponzi Scheme
The United States Commodity Futures Trading Commission (CFTC) has filed a complaint against a pastor, accusing him of running a multilevel marketing scheme that defrauded over 1,500 people, including some who attended his church in Washington state.
The Allegations
On December 10, the CFTC announced that it had filed a complaint against Francier Obando Pinillo for fraud and misappropriation as part of what it claimed was a multilevel marketing scheme. The regulator alleged that Pinillo, a pastor at a Spanish church in Pasco, Washington, promised his congregants and others through social media that he operated a trading platform that rewarded users with "high-performance" crypto trading.
The Scheme
According to the CFTC’s complaint, which was filed on December 9 in a Spokane federal court, Pinillo claimed to be the CEO of Solanofi, Solano Partners Ltd., and Solano Capital Investments. He allegedly told customers that these companies had developed a "Solano ecosystem" in which he traded Bitcoin (BTC), Ether (ETH), Tether (USDT), and other cryptocurrencies on behalf of clients.
The Promises
Pinillo promised customers that they would receive monthly profits of up to 34.9% through Solanofi, which was said to use a bot and other software for crypto trading. A staking service for Bitcoin, Ether, Solana (SOL), USDT, and Dogecoin (DOGE) was also offered through a service known as Solanofi 2.0, which allegedly guaranteed profits to customers.
The False Promises
However, the CFTC alleged that no trading or staking service existed as promised. "These representations and account statements were false," the CFTC said in its complaint. "There was no automated computer trading program, there were no customer accounts, there was not trading taking place or profits generated, and Defendant was misappropriating all digital and fiat assets customers transferred."
The Targets
The CFTC alleged that "unsophisticated customers" with little to no experience in digital asset transactions, commodity interest trading, or staking digital assets were targeted. The regulator noted that Pinillo’s solicitations were almost exclusively in Spanish, which allowed him to abuse his position of trust as a pastor.
The Consequences
The CFTC is seeking restitution to defrauded customers, forfeiture of all funds generated through the scheme, a trading ban, and a permanent injunction. Information on Pinillo’s lawyers was not immediately available. Pinillo did not respond to a request for comment sent via social media.
The Implications
This case highlights the importance of being cautious when investing in crypto assets. The CFTC has warned that multilevel marketing schemes can be particularly insidious, as they often rely on personal relationships and trust. Investors should always do their own research and due diligence before investing in any asset.
Related Cases
The CFTC has been actively pursuing enforcement actions against individuals and companies accused of engaging in crypto-related wrongdoing. In 2024, the regulator announced that it had secured a record $17 billion in settlements and enforcement actions thanks to its efforts to crack down on crypto-related fraud.
How to Protect Yourself
To avoid falling victim to similar scams, investors should be aware of the following red flags:
- Unsolicited investment opportunities
- Promises of guaranteed profits or returns
- Lack of transparency about how funds are being used
- Pressure to invest quickly without doing thorough research
By being vigilant and doing their own research, investors can protect themselves from falling victim to crypto-related scams.
Conclusion
The CFTC’s lawsuit against Pinillo is a reminder that individuals who engage in crypto-related wrongdoing will be held accountable. The regulator’s efforts to crack down on crypto-related fraud are crucial in protecting consumers and maintaining the integrity of the markets.
Sources
- CFTC: Complaint Against Francier Obando Pinillo
- CFTC: Press Release Announcing Record $17 Billion in 2024 Enforcement Actions