CFTC Closes Fundsz Case With Millions Owed and Permanent Trading Bans

TLDR

• CFTC secured a $31.48 million judgment against Fundsz operators Brian Early and Alisha Ann Kingrey.
• The court found both defendants misled investors about profits, trading performance, and potential losses.
• Both operators withdrew profitability claims and sought to remove Fundsz’s social media presence after learning of the investigation.
• Rene Larralde’s estate must surrender a residence and more than $2.7 million in other assets.
• Permanent trading bans and consent orders resolve all remaining claims in the CFTC’s Fundsz case.

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The CFTC announced a court judgment against two Fundsz operators on September 30 in a digital asset and precious metals fraud case. Brian Early and Alisha Ann Kingrey must pay more than $31 million in restitution and civil penalties. 

CFTC Secures Fundsz Fraud Judgment

The U.S. District Court for the Middle District of Florida entered the default judgment against both defendants. The case involved Fundsz, an unincorporated entity, and its website.

The court ordered $15,732,455 in restitution and a $15,752,455 civil penalty. It also imposed permanent trading and registration bans, alongside orders barring further violations of federal commodities law.

Early and Kingrey served as Fundsz board members and moderated its Telegram group. The court found that they misled participants about expected profits, earlier trading results, and the risk of losing money.

The judgment follows a separate Cash FX Group lawsuit filed on September 25. In that case, the agency alleged that defendants collected more than $950 million through a fraudulent foreign exchange investment scheme. 

Court Examines Trading and Withdrawal Claims

The court found that Early and Kingrey falsely promoted a proprietary trading algorithm. They also told participants they could withdraw their money with interest after 180 days.

After learning about the CFTC investigation, both defendants began retreating from their profit claims. The court found that they also sought to remove Fundsz from social media. Separately, updated crypto guidance addressed tokenized assets and blockchain records on September 24. The guidance allows certain tokenized investments when they preserve equivalent rights, while retaining custody and customer fund safeguards. 

Other Defendants Face Separate Orders

The court also entered consent orders involving Juan Pablo Valcarce and Rene Larralde’s estate. Larralde died in 2023, and Rachel Larralde joined the case as his estate’s representative.

The court directed the estate representative to surrender a residence purchased with investor money and other assets worth more than $2.7 million. Those assets must go to the receiver overseeing recovery. 

In another oversight development, a congressional trading investigation expanded on September 29 to include Crypto.com, Hyperliquid Labs, and PredictIt. Lawmakers requested records covering customer checks and suspicious trading controls, with responses due October 13.

Valcarce faces permanent trading and registration bans. The court also barred further legal violations. The CFTC said the judgment and consent orders settle all remaining claims in its Fundsz enforcement action.