An Oregon man named Sam Ikkurty has been ordered to pay over $209 million to the Commodity Futures Trading Commission (CFTC) for running a multi-million dollar crypto ponzi scheme. Ikkurty allegedly lured participants with the promise of a steady 15% income per year through crypto investments, falsely claiming to have personal success in trading digital assets. In reality, his experience with crypto consisted of losing his own Bitcoins to a hack, and his venture plummeted by over 98.99% in a short period of time. Following the collapse of his fund in 2022, the CFTC filed a lawsuit against Ikkurty and was able to recover $18 million of stolen assets this past August. The final judgment includes a $110 million civil monetary penalty, $83 million in customer restitution funds, nearly $37 million in unlawful gains, and a $14 million contempt fine for Ikkurty and his fund, Jafia.
The CFTC accused Ikkurty of running illicit “crypto hedge funds” and gaining participants’ confidence through deceptive practices that misrepresented the true nature of his investments. By holding webinars and trade shows and touting his success with digital assets, Ikkurty was able to attract unsuspecting investors who believed they would receive substantial returns on their investments. However, the CFTC found that many of Ikkurty’s statements were untrue, and he failed to disclose the dramatic losses his fund experienced to his investors. The director of enforcement at the CFTC, Ian McGinley, condemned Ikkurty’s actions, labeling his schemes as traditional Ponzi schemes disguised as cutting-edge crypto and carbon investments.
In a twist of events, following the collapse of his fund, Ikkurty fled to India and was held in contempt of court for allegedly stealing the recovered digital assets. Despite this setback, the CFTC was able to track down and recover $18 million of the stolen assets in August. McGinley praised the efforts of the CFTC staff in shutting down the fraudulent schemes, obtaining a significant money judgment, and recovering the stolen assets. The recovery of the assets was deemed a significant achievement for both the CFTC and the victims of Ikkurty’s fraud. The outcome of the case serves as a warning to others who may engage in similar fraudulent activities in the crypto space.
As part of the final judgment, Ikkurty has been ordered to pay a total of $209 million, including a $110 million civil monetary penalty, $83 million in customer restitution funds, nearly $37 million in unlawful gains, and a $14 million contempt fine. Additionally, Ikkurty and his fund, Jafia, are prohibited from registering with the CFTC or engaging in any digital asset trading activities in the future. The severe financial penalties imposed on Ikkurty serve as a deterrent to others who may be tempted to engage in fraudulent schemes in the crypto industry. The CFTC’s decisive action in pursuing legal action against Ikkurty and recovering stolen assets demonstrates the agency’s commitment to protecting investors and maintaining integrity in the digital asset market.
