The Commodity Futures Trading Commission (CFTC) has announced that the U.S. District Court for the District of Arizona has issued a default judgment against Debiex, a digital asset platform accused of fraud. The court found Debiex liable for fraudulent activities related to digital asset commodity trading and misappropriating over $2 million from customers' funds.
The court's order, dated March 13, prohibits Debiex from participating in any CFTC-regulated markets or registering with the CFTC. Additionally, Debiex is required to pay a civil monetary penalty of $221,466 and over $2.2 million in restitution.
Zhāng Chéng Yáng, identified as a relief defendant in the case, acted as a money mule by allowing his digital asset wallet to be used by Debiex to misappropriate at least one customer's funds. Zhang is believed to be a Chinese national. On March 12, the court ordered that remaining digital assets in Zhang’s wallet be returned to the affected customer. These assets are valued at approximately $120,000 before transfer fees.
Director of Enforcement Brian Young stated: "This judgment demonstrates the CFTC’s ongoing commitment to protecting U.S. citizens from online scams." He also commended Jenny Chapin, Dmitriy Vilenskiy, and former Division Deputy Director Joan Manley for their work on this matter.
The CFTC warns that orders requiring repayment may not always result in recovery due to insufficient funds or assets held by wrongdoers. The commission remains committed to protecting customers and holding wrongdoers accountable.
The orders follow a complaint filed by the Commission on January 17, 2024. The complaint alleged that Debiex operated websites targeting victims with fraudulent schemes involving purported digital asset commodity trading. The scheme involved three groups: solicitors who contacted victims via social media; customer service representatives who set up fake trading accounts; and money mules like Zhang whose wallets were used for fund misappropriation.
The Division of Enforcement acknowledged assistance from the FBI’s Phoenix Office and highlighted contributions from DOE staff members including Jennifer Diamond, Mary Lutz, and Elizabeth Padgett.
The CFTC continues its efforts against online scams by issuing advisories warning users about romance frauds linked to forex contracts and digital assets trading platforms. The public is urged to verify company registrations with NFA BASIC before investing funds.
Suspicious activities can be reported through various channels including a toll-free hotline or online tips. Whistleblowers may receive between 10% and 30% of collected monetary sanctions through the Customer Protection Fund.
