US regulator charges two men behind a $44 million crypto Ponzi scheme

A US regulator has charged two men for being behind a multi-million-dollar cryptocurrency scam that stole funds from more than 100 investors.

The Commodity Futures Trading Commission (CFTC) has published a new press release that states Sam Ikkurty of Portland, Oregon, and Ravishankar Avadhanam of Aurora, Illinois, have been charged with fraudulently soliciting $44 million from investors as well as controlling and operating a commodity pool that was never officially registered with authorities. Notably, the two individuals scammed investors through asset income funds such as Ikkurty Capital, Rose City Income Fund, and Seneca Ventures.

The two men promoted their scam projects via YouTube videos and directed investors to their website where investors were informed that their funds would be used to generate return-on-investment (ROI) annually. The US regulator explained that instead of directly stealing funds from investors the two individuals "misappropriated participant funds by distributing them to other participants, in a manner akin to a Ponzi scheme."

"The defendants transferred some participant funds to other accounts under their control and for their benefit. The defendants also transferred millions of dollars to an off-shore entity that, in turn, may have transferred funds to a foreign cryptocurrency exchange. None of these funds were returned to the pool," the complaint stated.

The CFTC is now seeking restitution for the illegal activities and has filed a civil enforcement action in the U.S. District Court for the Northern District of Illinois where the regulator wants funds to be returned to be investors, "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."

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