Blockchain News

CFTC wins legal battle, accuses CabbageTech Corp of conducting fraud

A judge has ruled in favor of the US Commodities Futures Trading Commission (CFTC) in a dispute involving CabbageTech Corp, following claims that the Commission does not have the authority to lay claims.

CabbageTech Corp, a New York-based firm, has been found guilty of fraudulent behavior that the U.S. Commodities Futures Trading Commission (CFTC) found.

According to Bloomberg, the CFTC won a case against the company which was accused of conducting “bold and vicious fraud“. The legal battle, overseen by U.S. District Judge Jack B. Weinstein in Brooklyn, New York, saw Patrick McDonnell of CabbageTech argue that the CFTC did not have the authority nor the right to issue regulatory claims against his company. Weinstein, however, felt otherwise and rejected McDonnell’s claims in a nonjury trial which took place in July of this year.

The documentation from the court case shows the attempts by McDonnell to undermine the CFTC’s authority:

The CFTC had ‘no cause or authority’ in the first place to file this trumped-up case, more or less, and build a body of digital law on me.”

Regarding the fraud, the CFTC was also accusing McDonnell of “misappropriation in connection with purchases and trading of Bitcoin (BTC) and Litecoin (LTC)”. Judge Weinstein commented that McDonnell was operating a “boiler room” and was cheating quantities of investors from a number of different states and countries out of their funds in a method which made use of “trickery, false statements, and misappropriation of funds.”

In response to the crimes committed, McDonnell was ordered to pay $290,429 USD in restitution and a further $871,287 USD in penalties for his actions.

During the court case, McDonnell had claimed that he could not bear the expense in order to pay for counsel and thus acted as his own lawyer, despite the fact that the judge had implored that he looks to free legal support for help. According to Bloomberg, after a while, McDonnell simply ceased attending court meetings, at which time Weinstein granted a default judgment against CabbageTech, as not having representation by any lawyer.