Ninth Circuit Upholds $3.2M CFTC Judgment Against Crypto Ponzi Operator
CFTC Wins Big: Appeals Court Keeps Crypto Trader on Hook
The Ninth Circuit just handed the CFTC a decisive win, ruling that James Devlin Crombie can’t dodge liability for his alleged Bitcoin Ponzi scheme. The court refused to unwind a $3.2 million default judgment against Crombie, keeping pressure on anyone using crypto to run unregistered commodity schemes.
Crombie was accused of running a fraudulent operation called MyBitcoin through which investors handed over roughly 80,000 BTC, only to see their funds vanish. When the CFTC sued, Crombie ignored the complaint, forcing the district court to enter default judgment. He later tried to reopen the case, claiming he had never been properly served and that he lacked notice of the suit. The appeals court wasn’t buying it. Judges held that the CFTC’s service by publication satisfied due-process requirements and that Crombie’s own delay in responding was not excusable. The result: the full judgment—including a permanent trading ban and restitution—remains intact.
The decision tightens the legal noose around crypto actors who treat federal regulators as optional. By confirming that the CFTC can use publication when personal service fails, the ruling makes it harder for defendants to claim ignorance and walk away. It also signals that courts will treat Bitcoin and similar digital assets as commodities when they are offered as investment vehicles, reinforcing the agency’s reach over unregistered futures and swaps.
For traders and platforms, the message is blunt: ignoring a CFTC summons is now an expensive gamble, and the commodity label on crypto continues to expand. Exchanges and DeFi protocols that facilitate leveraged or pooled trading without registration face the same exposure Crombie could not escape.
The CFTC just proved it can collect even when defendants hide; the next test is whether platforms will register before the agency comes knocking.
