What's in this article
Two people have been indicted by the US CFTC for a fraudulent cryptocurrency scheme that caused investors to lose $44 million.
The United States Commodity Futures Trading Commission has indicted two U.S. residents and their organizations for defrauding more than 170 investors.
CFTC Charges Two Men for $44M Crypto Scam
The CFTC claimed that defendants Sam Ikkurty and Ravishankar Avadhanam illegally demanded a total of $44 million from investors.
He also accused him of operating an illegal commodity pool and failing to register with the CFTC as a Commodity Pool Operator.
According to the commission’s complaint, the duo introduced three funds (Ikkurty Capital, Rose City Income Fund and Seneca Ventures) called digital asset income funds to investors. They worked to defraud unsuspecting investors.
They tried to attract investors from many channels such as Youtube. The alleged scam was that the pooled funds would be used to invest in various digital assets, commodities, swaps, derivatives and futures contracts, resulting in a high annual return on investment. They also managed to raise $44 million from over 170 investors.
The CFTC also said that the scammers did not invest with funds from investors. He claimed that they misused the participant funds by distributing them to other participants in a manner similar to a Ponzi scheme.
The commission noted that Ikkurty and Avadhanam reserved some of the funds for themselves and other participants. The remaining funds were transferred to some organizations.
“Defendants transferred some of their participant funds to other accounts under their control and for their benefit. The defendants also transferred millions of dollars to an offshore organization, which in turn may have transferred money to a foreign cryptocurrency exchange. None of these funds were returned to the pool”.
CFTC Seeks Restitution
A US federal court has ordered the defendants’ assets to be frozen.
The CFTC seeks the return and liquidation of ill-gotten gains.