What has happened?

A US federal court has ordered Dillon Michael Dean and his UK-registered company, The Entrepreneurs Headquarters Ltd (TEH), to pay over $1.9 million in "civil monetary penalties and restitution".

What does this mean?

Following a complaint by the Commodity Futures Trading Commission (CFTC), the US District Court for the Eastern District of New York has found that Dean, from Colorado, and TEH had "engaged in a fraudulent scheme" to solicit bitcoin from the public.

According to the court's judgment, between April 2017 and 18 January 2018, when the CFTC filed its complaint, Dean and TEH solicited almost $500,000 worth of bitcoin from at least 127 people, misrepresenting that the funds would be pooled and invested in products, including binary options.

"The defendants promised to convert this Bitcoin into fiat currency to invest on their customers’ behalf in a pooled investment vehicle for trading commodity interests, including trading binary options on an online exchange designated as a contract market by the CFTC", the CFTC said in a statement.

However, the court found that Dean and TEH misappropriated the funds, resulting in at least 120 customers losing about $432,000.

Dean and TEH had also failed to register with the CFTC.

According to the court's order, the defendants used company websites, YouTube videos and Facebook posts to lure potential customers, promising high rates of return and claiming that Dean had "strong skills" in options trading.

The court ordered the two defendants to pay, jointly and severally, about £432,000 in restitution to customers and about $1.5 million civil monetary penalty.

However, the CFTC cautioned that victims may not see any of their money back since the wrongdoers may not have enough funds or assets.

Earlier this month, the CFTC issued a customer advisory, warning the public to be cautious and to conduct research before purchasing digital coins or tokens.

[View source.]