The Commodity Futures Trading Commission (CFTC) has indicted two men and their entities alleged to have been involved in a $44 million crypto Ponzi scheme.
CFTC to Recover Funds Defrauded from Investors
The two defendants are Sam Ikkurty from Portland, Oregon, and Ravishankar Avadhanam from Aurora, Illinois. Although the crypto Ponzi schemers have been apprehended, the commission states that it is yet to recover millions of dollars.
It alleges that Ikkurty and Avadhanam kept $18 million for themselves and transferred the rest to an off-show entity, likely to be a foreign cryptocurrency exchange.
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CFTC is accusing the two individuals of fraudulently soliciting over $44 million for participation interests in a fronted income fund investing in digital assets and other instruments. The two reached unsuspecting investors through advertising on a website and videos posted on YouTube.
Besides, the two are also facing charges of illegally operating a commodity pool since they failed to register their entities with a market regulator.
The Ponzi scheme ran from January 2021 and defrauded at least 170 investors. The Florida-based company, owned by Ikkurty Jafia LLC, is also charged for the $44 million crypto Ponzi scheme. The other entities are Ikkurty Capital (Rose City Income Fund), Rose City Income Fund II LP, and Seneca Ventures.
CFTC Has Some Demands Against the Crypto Fraudsters
U.S. District Court Judge Hon. Mary Rowland signed an ex-parte statutory restraining order against the defendants on May 11, 2022. The order froze assets controlled by the two while preserving records and appointing a Temporary Receiver. Later on, on May 16, 2022, the crypto fraudsters were served with the process, and their status hearing was scheduled for May 25, 2022.
CFTC wants restitution, disgorgement, civil monetary penalties, and a permanent trading ban imposed on the crypto Ponzi schemers and their entities.
Additionally, the commission is also seeking injunctions against future violations of the Commodity Exchange Act (CEA) by the two.
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