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US Court Orders Sam Ikkurty to Pay $84 Million for Cryptocurrency Ponzi Scheme
A federal court has ordered Jafia LLC and its owner, Sam Ikkurty, to pay nearly $84 million to cryptocurrency investors after ruling that the company was operating a Ponzi scheme.
The ruling, issued by Judge Mary Rowland in the U.S. District Court for the Northern District of Illinois, follows a lawsuit filed by the Commodity Futures Trading Commission (CFTC) in 2022 after the fund collapsed.
Judge Rowland found that Ikkurty, based in Portland, Oregon, did numerous false claims on his company’s hedge funds.
These included misleading statements about his trading experience and the promise of high and stable profits. Instead, Ikkurty used funds from new investors to pay off previous investors, a hallmark of a Ponzi scheme.
The Ponzi Scheme
The court found that Ikkurty misappropriated investment funds for personal use without the knowledge of the investors. These funds were used for personal use and were reported as Fraudulent Investmentscausing significant financial losses to customers.
This non-transparent operation violated Transparency Commission regulations, which led to the imposition of a hefty fine to compensate defrauded investors and restore some public confidence in the financial system.
Judge Rowland emphasized that fraudulent activity such as this violates the law and undermines the integrity of modern financial markets. The $84 million award seeks to address the financial harm inflicted on investors and reinforce the importance of legal compliance in cryptocurrency trading.