Washington, D.C. – CFTC Settles Charges Against Jacob Orvidas for Bitcoin Fraud
The Commodity Futures Trading Commission (CFTC) has issued an order today, simultaneously filing and settling charges against Jacob Orvidas. The order reveals Orvidas’ fraudulent activities involving the solicitation of at least four individuals to trade leveraged bitcoin in a commodity pool. Orvidas not only lost almost all of the funds through trading but also lied to the participants about the losses and the availability of their money. Additionally, Orvidas failed to register as a commodity pool operator.
Penalties and Bans
The CFTC order requires Orvidas to pay over $2 million in restitution and a $500,000 civil monetary penalty. Orvidas is also required to cease and desist from further violating the Commodity Exchange Act. Furthermore, the order imposes a 10-year registration and trading bans against Orvidas.
Statement from Director of Enforcement
“Protecting ordinary people has always been at the heart of the CFTC’s digital-asset enforcement program,” said Director of Enforcement Ian McGinley. “While digital-asset cases are often complex, this bitcoin case is a straight-up fraud: simple and old as time. We will continue to deploy every weapon in our arsenal to fight fraud in all our markets.”
From approximately October 2017 through at least July 2020, Orvidas fraudulently solicited at least four pool participants to trade leveraged bitcoin on their behalf in a commodity pool. Orvidas deceived the participants by misrepresenting his own trading prowess and making false promises of outlandish profits and money protection. For instance, Orvidas claimed that another client contributed $100,000 worth of bitcoin and cashed out at $2.7 million, stating that crypto trading is like printing money. These claims were all false. As a result, pool participants contributed over $2 million to Orvidas’ commodity pool, only to lose almost all of it due to his trading losses.
To cover up these losses, Orvidas provided fictitious spreadsheets to the participants, falsely reflecting trading profits and high account balances. He also lied about the reasons for not being able to pay out profits and return principal. Consequently, the pool participants suffered losses exceeding $2 million.
The CFTC acknowledges the assistance of the Securities and Exchange Commission in this matter.
Division of Enforcement Staff
The Division of Enforcement staff responsible for this matter are Anthony Biagioli, Stephen Turley, Jeff Le Riche, Christopher Reed, and Charles Marvine.