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Bitcoin currency operators slapped with lawsuits alleging fraud

The Commodity Futures Trading Commission says three separate cryptocurrency-related companies defrauded customers.

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Two Bitcoin-related lawsuits have been announced by the Commodity Futures Trading Commission.

CNET

If that Bitcoin investment company's claims seem too good to be true, maybe they are.

The US government regulator in charge of futures markets, known as the Commodity Futures Trading Commission (CFTC), announced lawsuits against two different companies involved in Bitcoin and other cryptocurrencies. 

One company, CabbageTech, Corp. d/b/a Coin Drop Markets, induced customers to pay for currency trading expertise that was never provided, according to the CFTC.

Another, The Entrepreneurs Headquarters Limited, is being sued for soliciting "at least $1.1 million worth of bitcoin from more than 600 members of the public," according to the CTFC press release, and among other allegations used the funds to pay other customers, Ponzi-scheme style.

A third case is still under seal and has yet to be made public, according to Reuters

"Increased public interest in Bitcoin and other virtual currencies has provided new opportunities for bad actors," said James McDonald, the CFTC's Director of Enforcement, in a statement.

Entrepreneurs Headquarters Limited did not immediately respond to a request for comment made via its website. The website of Coin Drop Markets has been removed.

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