Statement Of CFTC Commissioner Kristin N. Johnson Regarding CFTC Order Finding That Jeremy Rounsville Of Hunt County Texas, Defrauded Customers In Digital Asset Arbitrage Scheme

Today, the Commodity Futures Trading Commission issued an order indicating that during a one-year period beginning in May 2018, Jeremy Rounsville defrauded investors seeking to invest in digital asset markets. Rounsville claimed to be the Chief Executive Officer of Arbritraging.co, a company that purportedly offered complex trading strategies in digital asset products. Arbitraging.co claimed to have created a “highly advanced arbitrage bot” that could—according to marketing materials—facilitate seamless automated arbitrage trading. The claims were, however, untrue. Arbitraging.co’s bot, known as the “aBOT,” never executed trades on behalf of investors.

Rounsville’s disturbing misrepresentations illustrate the necessity of the Commission’s unwavering commitment to fight digital assets fraud. Rounsville’s actions also demonstrate the importance of comprehensive market regulation. Both robust customer protections and market integrity-oriented regulations should be among our highest priorities in digital asset markets, each should be promptly forthcoming. While Rounsville simply manufactured fabrications to solicit funds, investors may genuinely and increasingly be lured into such schemes because the technology supporting complex trading strategies is already readily accessible. The uses of remarkably sophisticated trading technology in the digital asset ecosystem are, in fact, exceedingly competitive, particularly those strategies focused on capturing arbitrage gains or rents that, by definition, may be fleeting and elusive. Mounting evidence of increasing retail market participation parallels increasing efforts to peddle these complex trading strategies in digital asset markets without regard to suitability. Accordingly, I strongly encourage all members of the public to stay informed about the potential scams and abuses in digital assets markets by visiting our investor advisory page.[1]

Finally, I want to expressly recognize the hard work of the Division of Enforcement. I would like to commend Division staff for their efforts in bringing this action, including, Janin Gargiulo, Michael Cazakoff, Brent Tomer, Lenel Hickson, Jr., and Manal Sultan.

[1] See, CFTC Customer Advisory: Be Alert and Share Information to Help Seniors Avoid Fraud (issued June 15, 2022); CFTC Customer Advisory: Avoid Forex, Precious Metals, and Digital Asset Romance Scams (issued Feb. 2, 2022); CFTC Investor Alert: Watch Out for Fraudulent Digital Asset and “Crypto” Trading Websites (issued Apr. 26, 2019); CFTC Customer Advisory: Use Caution When Buying Digital Coins or Tokens (issued July 16, 2018); CFTC Customer Advisory: Beware Virtual Currency Pump-and-Dump Schemes (issued Feb. 15, 2018); CFTC Customer Advisory: Beware “IRS Approved” Virtual Currency IRAs (issued Feb. 2, 2018); and CFTC Customer Advisory: Understand the Risks of Virtual Currency Trading (issued Dec. 15, 2017), available https://www.cftc.gov/LearnAndProtect/AdvisoriesAndArticles.