Goliath Ventures Faces SEC, CFTC Actions Over Alleged $397 Million Crypto Fraud

Key Takeaways

• Goliath Ventures Faces Dual Regulatory Actions: The CFTC and SEC filed separate civil actions against Goliath Ventures on Aug. 11 over its alleged role in a large-scale crypto investment fraud.
• Nearly $400 Million Was Raised: According to the CFTC, approximately 1,600 customers contributed at least $397 million after being told their funds would be used to trade crypto assets, including bitcoin and ether.
• CFTC Alleges Customer Funds Were Misappropriated: The regulator alleges that customer money was not traded as represented and was instead misappropriated, including to make fictitious profit payments to existing customers.
• Customers Allegedly Received False Account Statements: The CFTC says customers were provided statements showing nonexistent profits and were falsely guaranteed the return of principal and, in some cases, profits.

Deep Dive

The CFTC filed a civil complaint against Goliath Ventures and its CEO, Christopher Delgado, in the U.S. District Court for the Middle District of Florida on Aug. 11, alleging that the company participated in a Ponzi scheme in which customer funds were misappropriated rather than invested as represented. The Securities and Exchange Commission filed a separate civil action against Goliath and Delgado the same day, according to the CFTC.

According to the complaint, Goliath and Delgado solicited and accepted funds from the public for purported crypto asset trading. The CFTC alleges that all customer funds were instead misappropriated, including through payments of fictitious profits to existing customers. The defendants also allegedly guaranteed the return of principal investments and, in some instances, profits.

Customers were given account statements reflecting gains that did not exist, the regulator alleges. Those statements helped sustain the appearance of an investment operation generating returns even as customer money was not being traded as represented. By the CFTC’s count, approximately 1,600 customers contributed at least $397 million to the alleged scheme.

The Aug. 11th filings place Goliath Ventures at the center of separate civil actions by both of the country’s principal market regulators. The CFTC is seeking restitution, disgorgement, civil monetary penalties, trading and registration bans, and a permanent injunction against further violations of the Commodity Exchange Act and CFTC regulations charged in its complaint.

The SEC filed its own civil action against Goliath Ventures and Delgado on the same day. The CFTC’s announcement did not provide details of the SEC’s specific allegations or the relief sought in that case, and the two proceedings remain separate.

They also follow an earlier federal criminal case. In June, Delgado pleaded guilty to federal criminal charges for his role in the fraud in a prosecution brought by the U.S. Attorney’s Office for the Middle District of Florida. That proceeding is distinct from the civil enforcement actions now being pursued against Goliath and Delgado.

The result is an enforcement matter extending across the CFTC, SEC and federal prosecutors, each operating under its own authority but addressing conduct connected to the same alleged scheme.

CFTC Chairman Michael S. Selig said the commission would continue pursuing fraud, abuse and manipulation in crypto asset markets while working to establish clearer rules for legitimate market participants. David I. Miller, director of the CFTC’s Division of Enforcement, said the agency would continue taking action against fraud involving digital commodities.

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