CFTC recovers $18 million worth of crypto from alleged commodity pool 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 failing to tell investors that the fund's performance fell 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 purported crypto expertise was a sham because his actual experience with digital assets consisted solely of losing his personal Bitcoins to a hack," according to the agency's release. 

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, around $110 million for a civil monetary penalty. Ikkurty was also ordered to pay 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."