CFTC Recovers $18 Million from Ponzi Scheme

The United States Commodity Futures Trading Commission recovered $18 million worth of digital assets tied to an alleged commodity pool Ponzi scheme.

Oregon man Sam Ikkurty was accused of defrauding investors from a purported crypto hedge fund. Allegedly, Ikkurty promised to return “net profits” to investors but failed to do so, even neglecting to inform them that the fund’s performance had fallen 98.99% within months, according to a release from the CFTC.

The order also found Ikkurty invested in unstable digital asset commodities contrary to his promises to participants, and his alleged crypto expertise was a sham because his actual experience with digital assets consisted solely of losing his personal Bitcoins to a hack.

U.S. District Court for the Northern District of Illinois Judge Mary Rowland ordered Ikkurty and several other entities to pay a total of $209 million, including:
– Nearly $84 million in customer restitution
– Around $37 million in unlawful gains disgorgement
– About $110 million for a civil monetary penalty
– A contempt fine surpassing $14 million

The defendants portrayed their programs as cutting-edge crypto and carbon investments when in reality they were plain, old-fashioned Ponzi schemes, said CFTC Director of Enforcement Ian McGinley in a statement. “CFTC staff not only shut down the defendants’ fraudulent schemes and obtained a money judgment of over $200 million, they also recovered more than $18 million in stolen digital assets that may otherwise have been lost forever.”