CFTC Nabs 2 Crypto Fraudsters Involving in a $44M Ponzi Scheme
Two suspected cryptocurrency fraudsters Sam Ikkurty of Portland, Oregon, and Ravishankar Avadhanam of Illinois have been charged by the United States Commodity Futures Trading Commission (CFTC) for illegally soliciting as much as $44 million through Ponzi-like scheme.
According to the Commodity and Futures regulator, both suspects utilized the social video streaming platform, YouTube to solicit funds from investors with the promise of investing the capital pool and paying out profits. The CFTC said the complaints it filed against both men allege that instead of investing the pool funds, the capital was being redistributed amongst signed participants in a scheme that can only be termed Ponzi Scheme.
The CFTC update showed that at least 170 people have fallen victim to the gimmicks from the two and that some of the funds which were intended for circulation were being used for their personal gains.
While a status hearing is scheduled for May 25, the CFTC said it is charging the duo for the fraud and for operating a community investment pool without appropriately registering such with the commission.
The CFTC now wants restitution for defrauded customers, “disgorgement of ill-gotten gains, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against further violations of the Commodity Exchange Act (CEA) and CFTC regulations.”
The majority of the enforcement actions being carried out by the CFTC is largely centered on the cryptocurrency ecosystem. Irrespective of the scale, the CFTC is notably playing a vital role in cracking down on cybercriminals, especially those looking for safe haven in digital or virtual assets.
Amongst the high-profile cases of law enforcement, the CFTC has handled in recent times includes the placement of LedgerX co-founders on leave following deep scrutiny from the commission. BitMEX exchange was also charged for operating an illegal crypto derivatives brokerage in the US for which it later paid $100 million in fines back in August last year.
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US CFTC Charges BitMEX For Operating Illegal Crypto Derivatives Exchange