CFTC charges firms, individuals with alleged $3.6M commodity investment scam

The Commodity Futures Trading Commission has charged two firms and several individuals in relation to an alleged investment fraud.

In a civil enforcement filing in the US District Court for the Western District of Washington the CFTC alleges that Aipu Limited and Qian Bai, and Lan Bai, together with Fidefx Investments Limited and Chao Li were involved in a scheme that fraudulently solicited and misappropriated at least $3.6 million from at least 32 customers, typically Asian Americans.

It claims that the firms and individuals began their activities in February 2023 and continue to solicit and accept fiat currency and digital assets from customers by “customers either directly funding a purported “trading account” with Aipu or Fidefx via their respective websites, or agreeing to trade commodity interests via Aipu and/or Fidefx after being contacted by solicitors acting on behalf of the defendants.”

The solicitors contacting investors claim to have insider knowledge that earns them 10% to 30% profits per trade trading in commodity interests such as leveraged or margined retail commodity transactions, retail forex, and/or commodity futures contracts, and offer to share this knowledge with the investors and help them trade.

The CFTC alleges that trading accounts are then set up but the statements within are false and that neither firm has trading accounts in the United States and no trading takes place. Instead, funds are moved to offshore entities with no connection to commodities trading and controlled by people located outside of the US.

The CFTC seeks restitution to defrauded customers, disgorgement of ill-gotten gains, civil monetary penalties, trading bans, and a permanent injunction against further violations of the Commodity Exchange Act and CFTC regulations.

The allegations have not been proven in court.