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CabbageTech is accused of cheating cryptoinvestors

The 46-year-old owner of a company called CabbageTech was accused in New York of deceiving investors of more than $ 200,000 in cryptocurrency and cash.

The New York District's US Attorney's Office announced on Tuesday that it had printed an indictment of nine counts that accused Patrick McDonnell, also known as Jason Flack, of fraud and arrested him.

Between November 2014 and January 2018, McDonnell allegedly presented himself as an experienced cryptocurrency trader, promising clients that he would provide them with trading advice, as well as buy and trade cryptocurrencies on their behalf. McDonnell is said to have used his company on Staten Island, CabbageTech Crop., Also known as Coin Drop Markets, to attract investment through social media platforms, including Facebook and Twitter.

However, according to the indictment, neither McDonnell nor CabbageTech provided any investment services. Instead, he sent investors “false” balance sheets, indicating that their investments were profitable, and stole their money for personal use. When customers asked for a refund, McDonnell allegedly justified the delay in returning at first, and then stopped responding altogether.

In total, McDonnell deceived at least 10 victims, at least $ 194,000 in cash, 4.41 bitcoin, 206 litecoin, 620 ethereum classic and 1,342,634 verge, according to the indictment.

“If the guilt is proven and convicted, McDonnell faces a prison term of maximum 20 years,” said Richard P. Donohue, an attorney for the Eastern District of New York.

Earlier, McDonnell was sued by the American derivatives regulator, Commodity Futures Trading Commission (CFTC), in January 2018, for escaping with client cryptoactive assets.

Later in July, the CFTC completed a case against McDonnell and sought a permanent injunction against him. McDonnell at the time refused to fight, saying that he did not have the resources or the ability to continue to challenge the accusations made against him.

In the same case, the presiding district judge notably supported the CFTC in defining cryptocurrency as goods. The question was whether the commission has the authority to regulate cryptocurrency as a commodity in the absence of federal rules and whether the CFTC law permits its jurisdiction in this matter.

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