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.

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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.

Alexander Stefanov