Court Orders $84 Million Repayment in Crypto Ponzi Scheme

A U.S. federal court has ordered Sam Ikkurty, a fraudulent crypto hedge fund owner, to repay nearly $84 million to investors deceived by his Ponzi-like scheme.

The Illinois District Court ruled against Ikkurty and his firms, mandating a restitution payment of $83,757,249 and disgorgement of $36,967,285, offset by any restitution paid.

Ikkurty operated entities including Jafia LLC, Ikkurty Capital, Rose City Income Fund, and Seneca Ventures. He promised investors high returns, such as a 15% annual income from proof of stake mining and potential gains of up to 2,708% from a $100 investment.

The court found he failed to deliver any net profits, instead running a scheme that redistributed funds from new investors to earlier ones, resembling a Ponzi scheme.

The Commodity Futures Trading Commission (CFTC) charged Ikkurty in 2022 for not registering as a commodity pool operator and running a fraudulent commodity pool.

Ikkurty argued he wasn’t under CFTC regulation or court jurisdiction, but the court affirmed its authority, stating it had federal question jurisdiction under the Commodity Exchanges Act.