CFTC Indicts Two Men Behind $44 Million Crypto Ponzi Scam

The U.S. Commodity Futures Trading Commission (CFTC) has indicted two U.S. residents and the group that implemented cryptocurrency investment schemes that defrauded more than 170 investors.

CFTC Indicts Two Men in $44 Million Crypto Scam

in the formula press releaseThe CFTC alleges that the defendants Sam Ikkurty and Ravishankar Avadhanam solicited a total of $44 million in fraudulent solicitation from investors through several entities they control.

The regulator also prosecuted defendants who operated illegal commodity pools and did not register as commodity pool operators with the CFTC.

According to the committee’s complaint, the duo promoted three so-called digital asset income funds to investors: Ikkurty Capital, Rose City Income Fund and Seneca Ventures. They tried to lure unsuspecting investors.

In January 2021, it started targeting investors through various channels such as the official website and YouTube channel. Some of the fraudulent claims have been that public funds can be used to invest in a variety of digital assets, commodities, swaps, derivatives and futures contracts, resulting in high annual ROI. They were able to raise at least $44 million from around 170 investors.

The CFTC also claimed that rather than investing with the investors’ funds, it “distributed participants’ funds to other participants in a manner similar to the Ponzi scheme and embezzled them.”

The committee also noted that Ikkurty and Avadhanam retained some of the funds for themselves and “other participants” and transferred the remainder to offshore companies under their control.

“Defendants have transferred some participant funds to other accounts they control for their own benefit. The defendants also transferred millions of dollars to an offshore entity that may have transferred funds to an offshore cryptocurrency exchange. None of these funds were returned to the pool,” the complaint was explained.

CFTC seeks reparation

A US federal court has already issued an order to freeze the defendant’s assets, as well as to preserve documents related to the plan and to designate a temporary beneficiary of investor funds.

The CFTC is currently pursuing compensation and additional collection of unfair profits. We are also pursuing civil and monetary penalties, permanent trade bans, and injunctive relief for violations of the Trade in Commodities Act (CEA) and CFTC regulations.

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