Sam Ikkurti, who managed several investment companies, including Ikkurty Capital, Jafia, Rose City Income Fund, Rose City Income Fund II, and Seneca Ventures, found himself at the center of a high-profile criminal indictment filed by the prosecution. Investigators found that Ikkurty promised his investors extremely high profits ranging from 15% to an incredible 2708% annually, depending on the amount of their investments. However, the promised returns were never achieved, leading to suspicions and subsequent investigation.
The funds raised from investors were used for investments in various cryptocurrencies, such as Ethereum (ETH), Olympus (OHM), and Wrapped Bitcoin (wBTC). In this process, the funds from new clients were redistributed among early investors in a financial pyramid scheme, meaning that late investors did not receive the promised returns. This approach, known as a Ponzi scheme, resulted in significant financial losses for many participants.
In 2022, the U.S. Commodity Futures Trading Commission (CFTC) charged Sam Ikkurti with orchestrating fraudulent schemes and engaging in illegal activities. Ikkurty claimed that his business was not under the jurisdiction of the CFTC, as his companies were not involved in trading commodity futures or entering into contracts for the sale of goods. However, these arguments were not accepted by the court.
The legal proceedings had consequences. Ikkurty’s motion for a summary judgment was denied, and now he is required to compensate the losses to affected investors in the amount of $83.7 million. Additionally, the businessman has to pay a fine of $36.9 million.
This case is just a part of a broader campaign against violations in the cryptocurrency sphere. For instance, in May 2023, CFTC fined the cryptocurrency broker FalconX $1.8 million for operating without proper authorization. Last year, the regulator stated its intention to pursue all cryptocurrency exchanges that do not comply with legislative requirements, underscoring the increasing attention and strictness of regulatory bodies towards the digital asset industry.
