CFTC says Cash FX traded less than 1% of the $950 million it raised
CFTC sued Panama-based Cash FX and three individuals, alleging the firm raised more than $950 million for a forex pool and traded less than 1% of it. Americans put in only about $27 million, so most of the case's US weight falls on an Oregon payment firm and a Florida promoter.
The Investor · Invest desk
What happened
- Participants were told skilled traders, proprietary algorithms and artificial intelligence ran the pool, and recruiters promised weekly returns of up to 15%.
- The CFTC says money from new participants paid earlier ones amounts presented as trading profits, and false account statements showed consistent gains.
- Some participants got their principal back through the recycled payments, but about 81% of them together lost at least $406 million.
- Chief executive Huascar Jose Lopez Castillo allegedly controlled the crypto wallets that received investor funds and personally kept tens of millions of dollars.
- The defendants have not yet answered the complaint, and none of the CFTC's allegations has been proven in court.
Why it matters
- Who's exposed exposure US firms that convert payments for an offshore pool, and US promoters who recruit for one, can be sued alongside its operators, which leaves them as the defendants a US court can most easily make pay restitution.
- Who has to decide decision Before sending money to a pooled trading program, an allocator can run the two checks this complaint turns on, operator registration and segregated assets, without having to judge the AI claims at all.
- What it sets up precedent With the CLARITY Act stalled in the Senate, the CFTC is going after crypto-funded pool schemes under the forex and commodity-pool rules it already has.
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Fifteen percent a week, compounded for a year, turns each dollar into about $1,433 [19]. By the CFTC's account, Cash FX made almost no attempt to earn it. The agency says less than 1% of incoming funds went into actual market activity [5]. Less than 1% of more than $950 million is under $9.5 million [20], spread over a solicitation period that ran from at least June 2019 to December 2023 [10].
Most of the rest went in a loop. If you take the $406 million in losses away from the $950 million raised, roughly $544 million is left to account for [21]. According to the complaint, that covers the recycled payments that gave some participants their principal back and whatever the operators kept [7][8].
The pitch was that skilled professionals, proprietary algorithms and artificial intelligence traded the pool [4]. The CFTC calls those representations false [5]. Neither report describes the AI claim as a standalone violation. The AI line fails on the same evidence as the line about skilled professionals: the trading record [5]. The legal failures the agency adds are that Cash FX never registered as a commodity pool operator and that it mixed participant assets with the operators' own accounts [13].
The American slice is small. More than 6,000 of the 400,000-plus funded accounts belonged to US residents, who put in at least $27 million [11]. That is about 1.5% of the accounts [23] and 2.8% of the money [22]. The firm is based in Panama and its chief executive is from Brazil [3]. The Conversion Pros and Pope are accused of handling the conversions and payments that kept the scheme running, and Halladay of promoting it [12].
The defendants have not answered, and nothing has been proven [15], so the facts may still be fought over. Suppose the CFTC wins the injunction, restitution, disgorgement and penalties it is asking for [14]. It could then collect by tracing the offshore wallets, and Crowdfund Insider noted that crypto payment channels make tracing harder [18]. Or it could collect from the Oregon and Florida defendants. I think the second route matters more to the case than the $950 million headline suggests, because those are the defendants who live inside US jurisdiction [3]. A large recovery traced from the wallets Lopez allegedly controlled would prove that wrong [8].
"The Division of Enforcement has continued to refocus on its core mission of protecting the public from fraud and manipulation," Director of Enforcement David I. Miller said [9]. The agency has also sent a separate crypto rulemaking to the White House for review [16]. This complaint does not depend on that rule. It describes a forex pool that was never registered and barely traded, with investor money arriving through crypto wallets [1][5][8][13].
What to watch
- Whether The Conversion Pros, Pope or Halladay settle before Lopez and Cash FX answer in the Middle District of Florida.
- Whether the CFTC freezes or traces assets in the crypto wallets Lopez allegedly controlled, which would move restitution beyond the US defendants.
- Whether later CFTC complaints charge AI-trading claims as a violation in their own right, which this case, as reported, does not do.
Information, not investment advice. This story is general information about companies and markets, drawn from cited reporting. It is not a recommendation to buy, sell or hold any security; check the cited sources before acting.
Clarity's read
What the record supports and how the coverage leans. The claims behind it follow.
Reality
- Evidence55
- Adoption
- Not scored
- Hype gap+5
- Incentives60
- Confidence60
Claim ledger
Ranked by verification strength, evidence, and original report placement.
- [1]
The CFTC sued Cash FX Group S.A. and several associated individuals, alleging they ran a multilevel marketing operation that collected more than $950 million under the pretense of pooled retail foreign-exchange trading.
- [2]
The CFTC said its complaint was filed Friday in the US District Court for the Middle District of Florida.
- [3]
The complaint names Panama-based Cash FX, its chief executive Huascar Jose Lopez Castillo of Brazil, The Conversion Pros Inc. and its chief executive Ronald Pope of Oregon, and Florida resident Justin Halladay.
- [4]
Participants were told their money would be placed in a commodity pool and traded by skilled professionals, proprietary algorithms and artificial intelligence, and promotional materials and recruiters allegedly promised weekly returns of as much as 15 percent.
- [5]
The CFTC says the representations were false and that Cash FX conducted only negligible forex trading, using less than 1 percent of incoming funds for actual market activity.
- [6]
New contributions were used to pay earlier participants amounts presented as trading profits, and false account statements were issued to create the appearance of consistent gains, the complaint alleges.
- [7]
Some investors recouped principal through recycled payments, while about 81 percent of participants together lost at least $406 million.
- [8]
The filing claims Lopez controlled cryptocurrency wallets that received investor funds and personally retained tens of millions of dollars.
- [9]
"The Division of Enforcement has continued to refocus on its core mission of protecting the public from fraud and manipulation," said Director of Enforcement David I. Miller.
- [10]
The defendants solicited funds from the public, including US residents, between at least June 2019 and December 2023, according to the CFTC.
- [11]
Over 400,000 accounts were funded worldwide, including more than 6,000 belonging to US residents who supplied at least $27 million.
- [12]
The Conversion Pros and Pope are accused of facilitating conversions and payments that kept the structure operating, while Halladay is alleged to have promoted the program.
- [13]
Cash FX was not registered as a commodity pool operator, and participant assets were not kept segregated from operators' accounts, the CFTC says.
- [14]
The agency is asking the court for a permanent injunction, restitution to harmed participants, disgorgement, civil monetary penalties, and bans on trading and registration.
- [15]
The allegations remain unproven in court; the defendants have not yet answered the complaint.
- [16]
Cointelegraph reported Sept. 18 that the CFTC had submitted a new regulatory action covering crypto asset transactions and markets for White House review.
- [17]
The Senate failed to advance the CLARITY Act, legislation aimed at establishing a federal regulatory framework for crypto markets.
- [18]
Crowdfund Insider wrote that the case shows how large sums can be attracted across borders through cryptocurrency payment channels that complicate tracing.
- [19]
A 15% weekly return compounded for 52 weeks multiplies a stake by about 1,433 times.
- [20]
Less than 1% of more than $950 million is under about $9.5 million put to actual market activity.
- [21]
The gap between the $950 million raised and the $406 million lost is roughly $544 million.
- [22]
US residents' at least $27 million is about 2.8% of the more than $950 million raised.
- [23]
More than 6,000 US accounts out of over 400,000 is about 1.5% of funded accounts.
Sources
2 independent publishers whose own reporting we read for this story.
- cointelegraph.comCFTC sues Cash FX, alleges $950M crypto-linked forex scheme
1 article · September 25, 2026
- crowdfundinsider.comCash FX Faces CFTC Lawuit Over Alleged $950M Cryptocurrency linked Forex Fraud
1 article · September 27, 2026
Topics and entities
Topics
- CFTC Enforcement
- Ponzi and High-Yield Investment Schemes
- Crypto Regulation and Licensing
Entities
- CFTC
- The Conversion Pros Inc.
- Huascar Jose Lopez Castillo
- Cash FX Group S.A.
- CLARITY Act