Two Americans charged in $44 million cryptocurrency pyramid scheme

A court in the United States charged residents of Oregon and Illinois and the companies linked to them with misappropriating $44 million through a sham investment scheme in cryptocurrency funds. The information was reported by the CFTC.

According to the agency, since 2017 Sam Ikkurty, also known as Shrinivas I Rao, and Ravishankar Avadhanam established three companies allegedly to attract investments.

Potential clients of Ikkurty Capital, Rose City Income Fund and Seneca Ventures were promised returns of up to 62% per year. The perpetrators advertised the project, including via YouTube videos. In reality, all three companies operated as pyramid schemes.

In total, they raised at least $44 million from 170 people.

According to the CFTC, the bulk of the funds obtained by Ikkurty and Avadhanam were distributed as profits among pyramid participants. Another $18 million was transferred to the defendants’ own accounts. Part of the funds, through an offshore entity, reportedly ended up on an unnamed foreign cryptocurrency exchange.

The federal court in Illinois froze the assets and appointed a temporary receiver to return the funds to victims.

The next hearing in the case is scheduled for May 25. The CFTC intends to seek penalties and impose a permanent ban on trading, registration and future violations of the Commodity Exchange Act on their part.

Earlier, U.S. authorities charged the CEO of Mining Capital Coin with fraud of $62 million.

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