CFTC Charges Two Individuals for $44 Million Cryptocurrency Fraud

The United States Community Futures Trading Commission (CFTC) has charged two US residents, Sam Ikkurty and Ravishankar Avadhanam, for their involvement in a cryptocurrency ponzi scheme that stole over $40 million from investors. The Commission also charged the defendants with operating an unregistered commodity pool.

Two Men Indicted for $44M Crypto Fraud

According to the official complaint, the CFTC alleged that the duo lured the victims into investing in three fake digital asset income funds.

Ikkurty and Avadhanam started their operations in January 2021 and solicited for funds from investors through their official website and Youtube channel. They promised to help investors invest the funds in digital assets to generate profits, the CFTC alleged.

The partners generated a total of $44 million from 170 investors, but did not invest the funds in digital assets as promised. Instead, the defendants distributed some of the funds to other investors in the form of a Ponzi scheme. They also kept some of the funds for themselves and transferred several million dollars to their personal accounts, the complaint alleged.

Amongst other things, the CFTC is seeking that the defrauded investors be compensated, the ill-gotten gains from the scheme be retrieved from the defendants, and that they be strongly warned against violating any CFTC regulations in the future. A restraining order has been issued to the alleged scammers and all the assets they own have been frozen.

Crypto Scams on the Rise

Meanwhile crypto scams have become innumerable in recent times. Earlier this month, Hong Kong authorities arrested a 24-year-old man for allegedly piloting a $191,000 crypto scam.

In March, the United States Department of Justice (DOJ) arrested and charged two men for their alleged involvement in $1.1 million wire fraud and money laundering, in connection with a non-fungible token (NFT) project.

Last December, the U.S. Securities and Exchange Commission (SEC) indicted a Latvian citizen for allegedly defrauding at least $7 million from hundreds of retail investors in the U.S. and other countries.