The Commodity Futures Trading Commission has filed a lawsuit against Cash FX Group and four related defendants, alleging they operated a multilevel marketing Ponzi scheme that raised over $950 million through promises of forex trading returns. The complaint, filed in the US District Court for the Middle District of Florida, states that participants lost at least $406 million and that the company diverted nearly all funds to the defendants instead of trading.
Cash FX reportedly told investors that expert traders, proprietary algorithms, and artificial intelligence would generate returns of up to 15% per week. The CFTC claims the company conducted only minimal forex trading and used new deposits to pay fictitious profits to earlier participants. The complaint also alleges that millions of dollars were transferred to the defendants and that Cash FX issued false account statements showing returns not generated through trading. The court has not yet determined the validity of the allegations.
Regulatory warnings about Cash FX began in 2019. The UK Financial Conduct Authority first issued a warning in December 2019, stating the firm was not authorised to provide financial services. The Central Bank of Ireland followed with a similar alert in July 2021, and Australia’s securities regulator, ASIC, issued a notice in October 2021. These warnings focused on its lack of proper licensing and did not establish a Ponzi scheme at the time.
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