CFTC Wins $31 Million in Major Crypto Fraud Case
The CFTC has secured a $31 million fine against Abner Tinoco and his company for a major crypto fraud, marking a significant victory in a three-year legal battle.
The US Commodity Futures Trading Commission (CFTC) has achieved a significant win against fraudulent crypto investor Abner Alejandro Tinoco and his company, Kikit & Mess Investments, LLC, concluding a three-year legal battle.
In October 2021, the CFTC filed a civil enforcement case against Tinoco and Kikit & Mess Investments, accusing them of fraud and misappropriation of over $3.9 million from 61 clients. Tinoco presented Kikit as a company managing portfolios in foreign exchange and cryptocurrency markets, but investigations revealed that he used client funds to finance his lavish lifestyle, including a private jet, mansion, luxury cars, and real estate.
The scheme was a Ponzi operation, using new investors' funds to pay fake profits to earlier investors. The CFTC successfully convinced Judge David C. Guaderrama to freeze Tinoco’s assets to prevent further misuse.
By March 2022, the CFTC secured a permanent injunction against Tinoco, banning him from trading in any CFTC-regulated market. On July 26, 2024, Judge Guaderrama ordered Tinoco and his company to pay over $31 million in fines. They must jointly pay $6.20 million in restitution to 199 fraud victims, $6.25 million in disgorgement with credit for restitution, and an $18.7 million civil monetary penalty.
Currently, Tinoco is serving an 84-month sentence in Salford, Arizona, after pleading guilty to wire fraud in November 2022. He was also ordered to pay $9.02 million in restitution to victims as part of his criminal case.
This victory underscores the CFTC’s commitment to protecting investors and maintaining market integrity. It serves as a strong warning against fraudulent activities in the financial markets.
The CFTC’s actions, in this case, highlight the importance of regulatory oversight in the cryptocurrency market. Investors should be cautious and conduct thorough research before investing. The CFTC remains dedicated to identifying and prosecuting fraud to ensure a fair and transparent market.
