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Home BREAKING NEWS

Judge Rules in Favor of CFTC in Crypto Ponzi Scheme Case

Matoy by Matoy
July 4, 2024
in BREAKING NEWS, BUSINESS, CRYPTO
Reading Time: 2 mins read
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  • Illinois judge rules in favor of CFTC in crypto Ponzi case involving altcoins.
  • Sam Ikkurty defrauded investors with promises of 15% annual returns from digital asset commodities.
  • Court orders Ikkurty to pay over $120 million in restitution and disgorgement.

An Illinois district court judge has ruled in favor of the United States Commodity Futures Trading Commission (CFTC) in a case involving a cryptocurrency Ponzi scheme. The ruling, made by Judge Mary Rowland, has classified two lesser-known altcoins, KlimaDAO (KLIMA) and Olympus (OHM), as commodities. The scheme, orchestrated by Sam Ikkurty from Oregon, involved several of his companies. Ikkurty deceived investors by promising steady annual returns of 15% from investments in “digital asset commodities,” including Bitcoin, Ether, KLIMA, and OHM.

Financial and Legal Consequences

In a statement released on July 3, the CFTC detailed how Ikkurty misled participants by claiming investments in stable crypto assets and overstating his past successes. Instead of generating profits, Ikkurty operated what the CFTC described as a Ponzi scheme, misrepresenting the fund’s performance and failing to disclose that its value had dropped by over 98.99% within months. He also transferred significant funds to early investors to hide losses, resulting in a $20 million shortfall for participants in the supposed carbon offset program.

Judge Rowland ordered Ikkurty to pay more than $83.7 million in restitution and $36.9 million in disgorgement. Additionally, the CFTC noted that Ikkurty previously lost all his personal Bitcoin holdings due to a hack.

Broader Implications

The CFTC initially accused Ikkurty and his associate, Ravishankar Avadhanam, of fraud and failure to register with the agency in May 2022. The pair solicited over $44 million from at least 170 people through a website, YouTube videos, and other methods, promising to trade cryptocurrencies, derivatives, and commodity futures contracts.

Disclaimer: BlockNews provides independent reporting on crypto, blockchain, and digital finance. All content is for informational purposes only and does not constitute financial advice. Readers should do their own research before making investment decisions. Some articles may use AI tools to assist in drafting, but every piece is reviewed and edited by our editorial team of experienced crypto writers and analysts before publication.
Tags: Judgeponzi
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Matoy

Matoy

If Matoy is not busy looking at the latest Web3 news, he's always in the kitchen cooking delicious meals for his family. He's also a competitive fighting game player and a car enthusiast

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