The United States Commodity Futures Trading Commission (CFTC) charged two US residents and their entities with executing a cryptocurrency investment scheme that defrauded more than 170 investors .
CFTC Charges Two Men Over $44 Million Crypto Scam
In an official press release, the CFTC alleged that the defendants, Sam Ikkurty and Ravishankar Avadhanam, had fraudulently solicited a total of $44 million from investors through various corporate entities under their control.
The regulator also accused the defendants of operating an illegal commodity pool and failing to register as a Commodity Pool Operator with the CFTC.
According to the Commission’s complaint, the duo had promoted three so-called digital asset income funds – Ikkurty Capital, Rose City Income Fund and Seneca Ventures – among investors. They have worked to attract unsuspecting investors.
They started targeting investors in January 2021 through various channels such as an official website, YouTube channel, and various other means. Some of the fraudulent claims were that the pooled funds would be used to invest in various digital assets, commodities, swaps, derivatives, and futures contracts, leading to a high annual ROI. They were able to raise at least $44 million from around 170 investors.
The CFTC also alleged that, rather than making any investments with investor funds, they “misappropriated participants’ funds by distributing them to other participants, similar to a Ponzi scheme.”
Furthermore, the Commission noted that Ikkurty and Avadhanam kept a portion of the funds for themselves and “other participants” and transferred the remainder to offshore entities under their control.
“The defendants transferred some funds from the participants to other accounts under their control and for their benefit. The defendants also transferred millions of dollars to an offshore entity that, in turn, may have transferred funds to a foreign cryptocurrency exchange. None of these funds was returned to the common fund”, indicates the complaint.
CFTC seeks restitution
A US federal court has already issued an order freezing the defendants’ assets, along with instructions to preserve documents related to the scheme and the appointment of a temporary recipient of investor funds.
The CFTC is now seeking the restitution and return of ill-gotten gains. It is also pushing for civil money penalties, permanent trade bans, and injunctions against future violations of the Commodity Exchange Act (CEA) and CFTC regulations.
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This post CFTC Charges Two Men Behind $44 Million Crypto Ponzi Scheme
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