The Commodity Futures Trading Commission (CFTC) charged two US citizens on Thursday with fraud “similar to a Ponzi scheme” in soliciting around $44 million from at least 170 investors through a website and YouTube videos.
Sam Ikkurty of Portland, Oregon, and Ravishankar Avadhnam of Aurora, Illinois, were named in the CFTC report, which also said that a judge had granted a restraining order freezing the two’s assets, preserving records, and appointing a temporary receiver.
According to the complaint, the two solicited funds from investors in order to “buy, hold, and trade digital assets, commodities, derivatives, swaps, and commodity futures contracts.” Moreover, it claims that instead of investing the funds as claimed, they stole them by transferring money to other participants “in a manner analogous to a Ponzi scheme.”
The same release mentioned that the defendants subsequently moved funds to accounts for their own benefit, including millions of dollars to an offshore entity. They are accused of running an illegal commodities pool and failing to register as commodity pool operators.
What is a Ponzi scheme in crypto?
A Ponzi scheme is a false investment strategy in which the scheme organiser promises high rates of return with no risk to investors. Such schemes are also used for fraudulent investment plans in which money is collected from later participants to make profits for earlier investors. This is like a pyramid scheme because it uses money from new investors to pay off old investors.
