For nearly four years, people in the United States and abroad bought into a foreign-currency trading pool that its promoters said was run by expert traders, proprietary bots and artificial intelligence. On September 24 the Commodity Futures Trading Commission told a federal court in Jacksonville, Florida, that the pool did almost no trading, that the daily returns shown to its members were numbers its chief executive entered himself, and that about 81% of participants collectively lost at least $406 million.

Everything below is the CFTC's account. It is a civil complaint. No defendant has answered it, and no court has found any of it true.

Who is named

Cash FX Group S.A., incorporated in Panama in 2018. It was "legally dissolved and liquidated in October 2022", the complaint says, and kept operating anyway.
Huascar Jose Lopez Castillo, its CEO, a resident of Brazil.
The Conversion Pros, Inc., a Nevada company that built and ran Cash FX's back office.
Ronald Pope, that company's President and CEO, of Salem, Oregon.
Justin Halladay, of Cocoa, Florida, who presented himself in promotional videos as a leader of the "Cash FX Power Team".

According to the complaint, none of them has ever been registered with the CFTC.

How the pitch worked

From about July 5, 2019 to about May 12, 2023, the complaint says, members bought trade contracts priced from $300 to $100,000. Cash FX promised that 70% of each would be traded in forex and 30% would pay for a trading course. A member could earn up to twice the contribution in returns and up to twice again in recruiting bonuses. All of the more than 400,000 accounts sat in the recruiting trees of Lopez and Pope, and about 95% in Halladay's.

The advertised rate was up to 15% a week. Pope, in a video the complaint dates to about September 20, 2019:

I guess what I can say here guys is we're not dealing with a company that's struggling to meet that 15% a week obligation . . . . They actually do far beyond that . . . .

Artificial intelligence was a recurring part of the pitch. Halladay, in a February 2020 video, credited returns he put at about 10% a week to

the algorithms, the artificial intelligence [which] is all built in house and perfected by our own team of engineers. It's not something we bought and it's not for sale, yet it's worth millions of dollars.

An August 25, 2021 email from Cash FX encouraged members to tell prospects "all about our proprietary AI and experts that do the trading for you while you sit back and watch."

In September 2021, at a "Grand Office Opening" in Panama, Lopez told attendees the company still had "geniuses working with AI". Then, in a video posted November 18, 2021 and captioned as livestreamed the day before, Cash FX's marketing director, who is not a defendant and is not named, said:

And, of course, there was always the intention for [Cash FX] to launch, uh, an AI as well, but it's a very, very slow process.

The complaint treats that as the first admission "that AI had not yet been deployed on behalf of Cash FX pool participants".

Where the returns came from

This is the finding inside the complaint that the release does not carry.

Pope's company built the back office that logged deposits and showed members their balances. The complaint says the daily figure that drove members' trading returns was put into it by hand: "Lopez manually entered the daily trade return rate for the purported trading pool", apart from several days when he asked a programmer at Pope's company to enter a rate he specified.

It says three things about those numbers:

They were never negative. The complaint says that "from July 2019 through July 2023, Cash FX supposedly never had a losing day in the global forex markets".
They were routinely entered in advance. On July 15, 2019, the complaint says, Lopez entered rates through July 25, 2019.
Pope knew they were entered ahead of time. On or about January 19, 2020, Pope wrote to Lopez:

I noticed you do not have any trade rates set for today and beyond. Just letting you know you might want to do that or it won't pay out [Trade Returns] today.

On or about February 26, 2021, the programmer told Lopez and Pope that an admin account had retroactively lowered a previous day's rate from 1.110% to 0.910%. Lopez called it a "system glitch". The programmer's reply, copying Pope: "[W]e checked the logs. [I]t was your account."

Members saw the results as account notices. One sent to a U.S. member on or about January 22, 2022 read: "Commission type: Trading Pool. Your commission now: $3,157.00." The complaint says that figure was false.

Where the money went

Members paid in bitcoin, sometimes straight into a personal wallet of Lopez's. The complaint's central claim is that Cash FX "engaged in, at most, de minimis forex trading, using less than one percent of the pool participant funds that it received for that purpose." Withdrawals, it says, were paid with other members' money, and:

At least $121 million went to wallets Lopez owned or controlled; he kept at least $96 million of it for his own benefit.
At least $15.4 million went to Pope and/or his company, with payments continuing through at least October 7, 2023.
At least $16 million went to Halladay, with payments continuing through at least June 29, 2022.

On or about December 11, 2019, the UK Financial Conduct Authority warned that Cash FX "may be providing or promoting financial services or products without our permission." Regulators from at least 19 countries issued warnings, the complaint says. Cash FX began dissolving in Panama in October 2022, kept taking deposits, and took its website down on or about October 30, 2023.

What the CFTC is asking for

Five counts: three kinds of fraud under the Commodity Exchange Act and CFTC rules; failure to register; and, against Cash FX and Lopez only, failing to run the pool as a separate entity and keep its money apart from Lopez's own. The complaint asks for a permanent injunction, trading and registration bans, disgorgement, rescission, civil monetary penalties, an accounting, and restitution "to every person or entity who sustained losses proximately caused by Defendants' violations".

It does not ask for an asset freeze or a receiver. No such motion appears among the docket entries CourtListener had indexed by September 25.

What a reader can do

Check registration before sending money. The CFTC's guidance: "Before working with any person or firm to trade in commodity futures, commodity pools, options, forex, or other derivatives, verify that the entity is properly registered with the CFTC." The free NFA BASIC database shows registration and disciplinary history.

A warning list is not a clearance. Cash FX does not appear among the 284 names on the CFTC's RED List of unregistered foreign firms as it stood on September 27. The list's own page says: "Even if the entity you are considering is not on the RED List, always check to see if it is registered with the CFTC before opening an account or paying any money."

Report. The CFTC takes tips on its online Complaint Form or at 866-FON-CFTC (866-366-2382). Its anti-retaliation protections and possible awards require the whistleblower Form TCR instead.

If you were in Cash FX, neither document gives you anything to file or a date to meet. Restitution has been requested, not ordered.

What the record does not say

No findings. Nothing in the complaint has been proved, and no defendant's response appears on the docket as indexed.
No criminal case. Neither the release nor the complaint mentions one.
No U.S. loss figure. The $406 million covers participants everywhere; the only U.S. dollar total is at least $27 million paid in.
No amount traded. The release says "minimal forex trading" and the complaint says less than one percent. Neither gives a dollar figure.
Who traded. The complaint identifies no trader. It says Pope passed on to Lopez, in February 2020, a member's report that one supposed trader was actually a part-time tour guide.