CFTC Charges Man for Allegedly Running $12M Bitcoin Ponzi Scheme

The Commodity Futures Trading Commission (CFTC) has filed a civil enforcement action against an Ohio resident, Rathnakishore Giri, and his companies over an alleged $12 million bitcoin Ponzi scheme. According to the announcement by the regulator on Friday, the man used the money to pay for his lavish lifestyle.

Man Faces $12M Bitcoin Fraud Charges

The CFTC alleges that Giri posed as a successful digital asset trader, and obtained over $12 million in cash and bitcoins from 150 investors in March 2019. 

Giri then told investors that he would help them invest the money in crypto through his companies NBD Eidetic Capital, LLC, and SR Private Equity, LLC, promising them high returns and also saying that they could withdraw their profits at any time, which were false and misleading statements according to CFTC.

The commission said instead of using the money for its intended purpose, Giri used it to pay for his lavish lifestyle.

“The complaint also alleges in their solicitations to customers, the defendants omitted material facts, including the defendants misappropriated customer funds to pay profits to other customers in a manner akin to a Ponzi scheme and also misappropriated customer funds to pay for Giri’s lavish lifestyle, which included yacht rentals, luxury vacations and luxury shopping,” CFTC said.

The agency also charged Giri’s parents, Giri Subramani and Loka Pavani Giri, as relief defendants for possession of funds in which they had no legitimate interest.

The CFTC said it is seeking “restitution to defrauded customers, 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.”

Not the First

Meanwhile, this is not the first Ponzi scheme case involving cryptocurrencies. Just recently, the Securities and Exchange Commission (SEC) charged 11 individuals for their alleged role in creating a crypto Ponzi scheme platform dubbed Forsage.

The SEC alleged that the founders used the platform to fraudulently raise more than $300 million from investors worldwide.

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