According to CryptoPotato, the Commodity Futures Trading Commission (CFTC) has filed a civil enforcement action in the US District Court for the Southern District of Florida against Pennsylvania-based Mosaic Exchange Limited and its owner and CEO Sean Michael for allegedly operating a fraudulent digital asset commodity scheme. The CFTC claims that Mosaic and its operators fraudulently solicited at least 17 people in the US and other countries to give them hundreds of thousands of dollars worth of bitcoin or other funds to trade BTC and other digital asset commodities on the customer's behalf, but instead misappropriated them.

Between February 2019 and June 2021, Mosaic allegedly made false representations about its assets under management, suggesting it was a significant player in the cryptocurrency trading market. The complaint also claimed that Mosaic had developed a proprietary trading algorithm with an 82% accuracy rate, which was used to generate substantial profits for customers. Additionally, Mosaic and its CEO falsely claimed to have established partnerships or broker agreements with certain crypto exchanges to add credibility to their operation.

The CFTC states that Mosaic did not possess the substantial assets under management as advertised and was found to have incurred losses while trading for its customers. The profit margins were also unsubstantiated, and Mosaic did not consistently achieve the high returns promised to investors. The complaint further asserts that the platform did not have the partnerships or broker agreements that were advertised, potentially misleading customers about the platform's legitimacy. CFTC Commissioner Kristin Johnson called the entire scheme a "sham" and a "virtual house of cards" that resulted in unsuspecting investors losing massive hard-earned wealth.