The US Commodity Futures Trading Commission (CFTC) has charged two suspected cryptocurrency fraudsters, Sam Ikkurty of Portland, Oregon, and Ravishankar Avadhanam of Illinois, with fraudulently soliciting as much as $44 million in a Ponzi-like scam.
According to the Commodity and Futures Commission, both suspects used the social video streaming network YouTube to solicit funds from investors with the promise of investing the capital pool and paying out rewards. However, the CFTC claims that instead of investing the pool monies, the capital was redistributed among signed members in a system that can only be described as a Ponzi Scheme, according to the accusations against both men.
According to the CFTC report, at least 170 people have fallen victim to the two’s tricks, with part of the monies intended for circulation being diverted for their advantage.
The CFTC has charged the duo with fraud and operating a community investment pool without properly registering with the commission, and a status hearing has been set for May 25.
The CFTC now seeks restitution for misled consumers, disgorgement of ill-gotten earnings, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against future violations of the CEA and CFTC regulations.
Most of the CFTC’s enforcement actions are focused on the bitcoin ecosystem. However, regardless of scale, the CFTC plays a critical role in combating cybercriminals, particularly those seeking refuge in digital or virtual assets.
The CFTC has recently handled several high-profile law enforcement matters, including the suspension of LedgerX co-founders after the commission conducted a thorough investigation. BitMEX was also accused of operating an illegal crypto derivatives brokerage in the United States, for which it paid a punishment of $100 million in August of last year.