CFTC Recovers $18M in Crypto From Commodity Pool Ponzi Scheme

The U.S. Commodity Futures Trading Commission (CFTC) has recovered nearly $18 Million in crypto from commodity pool Ponzi scheme. In an official press statement, CFTC announced that the U.S. District Court Judge for the Northern District of Illinois, Mary Rowland, made a final judgment against Sam Ikkurty of Oregon and Jafia, LLC, Ikkurty Capital, LLC (operating under “Rose City Income Fund I LP”, “Rose City Income Fund II” and “Seneca Ventures, LLC”).

The statement informs, “The courts order of final judgment and permanent injunction requires the defendants to pay $83,757,249 in restitution to customers of the so-called income fund; $36,967,285 in disgorgement of unlawful gains (offset by any amounts paid in restitution); and a $110,901,855 civil monetary penalty.”

Ikkurty was found guilty in misrepresenting to participants about “crypto hedge funds” and the supposed “net profits” they would earn. However, Ikkurty did not return any net profits to participants, and instead “ran something akin to a Ponzi scheme.”

The order also orders Ikkurty to pay $14,071,000 as a contempt fine, since he continued to unlawfully transferred digital assets from the Receivership Estate while this case was pending and breached a court order. Ikkurty is also ordered to pay back $884,788 in professional expenses advanced from the Receivership Estate to fund his defense.

The court has permanently banned Ikkurty and Jafia from registering with the CFTC. Ikkurty and Jafia has been barred from trading any digital assets or other commodity interests and requesting/accepting any funds for buying crypto or commodity interests. Lastly, the duo has been banned from executing any action that violates the Commodity Exchange Act (CEA) and CFTC regulations.

Judge Rowlands had previously, too, ruled in the favors of all CFTC charges which involved allegations of fraud and misappropriation of funds. The CFTC also recovered more than $18 million in digital assets that had been stolen from the court-appointed receiver.