A federal court has ordered a man to pay more than $571 million in fines for operating a 'fraudulent bitcoin trading scheme'

• A judge ordered a UK man to pay $571 million in fines for an allegedly fraudulent bitcoin scheme.
• Benjamin Reynolds allegedly took about 22,000 bitcoin from customers, now worth about $1.2 billion.
• Reynolds didn't appear in court in New York, and is "purportedly" in Manchester, US regulators said.

A court has ordered a man to pay penalties totalling about $571 million, after finding that he acquired more than 22,000 bitcoin through a fraudulent online scheme.

The fine was announced by the Commodity Futures Trading Commission (CFTC) regulator on Friday.

The bitcoin handed over by more than 1,000 customers in 2017 as part of the alleged scheme was valued at about $143 million at the time, but would now be worth about $1.22 billion.

The CFTC named Benjamin Reynolds, a British national, as the person behind the alleged scheme. But the CFTC didn't seem to know exactly where Reynolds was, saying in a press statement that he was "purportedly" living in Manchester, England.

Reynolds was ordered on March 2 to pay about $143 million in restitution and $429 million in a civil monetary penalty, according to the CFTC statement.

The judgement was issued by Mary Kay Vyskocil, a judge in the US District Court for the Southern District of New York. Vyskocil wrote that Reynolds had "failed to appear or answer the Complaint."

The CFTC alleged that Reynolds in 2017 used a website, social networks, and email to solicit about 22,190.542 bitcoin from people around the world.

Conducting business under the name Control-Finance Limited, Reynolds collected bitcoin from more than 1,000 people, including about 169 people living in the US, the CFTC said.

Control-Finance Limited was registered in England in September 2016, with its official address listed in a nondescript office building in the center of Manchester, according to UK government records. Reynolds, who was born in 1983, was listed as the company's sole director.

Under Reynolds, Control-Finance solicited bitcoin from customers who thought they were investing the cryptocurrency, according to the CFTC complaint.

"Among other things, Reynolds falsely represented to customers that Control-Finance traded their bitcoin deposits in virtual currency markets and employed specialized virtual currency traders who generated guaranteed trading profits for all customers," the CFTC said.

Reynolds also allegedly created an "elaborate" affiliate marketing network that promised to pay "outsized referral profits" and other rewards for bringing new bitcoin customers to Control-Finance.

The CFTC said: "In fact, Reynolds made no trades on customers' behalf, earned no trading profits for them, and paid them no referral rewards or bonuses."

The regulator said Reynolds said he would return all the deposited bitcoin to customers of Control-Finance by October 2017. He "instead retained the deposits for his own personal use," it said.

UK government records listed Control-Finance Limited as dissolved as of February 2018.

Vyskocil's judgement against Reynolds said the penalties would accrue interest if not paid immediately.