A New York federal court ordered the Ohio resident Michael Ackerman to pay more than $50 million for alleged fraud involving multimillion-dollar cryptocurrency investments.
Half of the awarded amount will be distributed as compensation to the victims. The defendant was also barred from trading on any markets under the jurisdiction of CFTC and from registering with the agency.
According to court documents, in 2020 Ackerman “ran a fraudulent scheme that extorted and misappropriated funds for allegedly trading digital assets”. More than 150 individuals and entities transferred about $33 million to the defendant.
“However, less than $10 million was used for trading, and the remaining funds were misappropriated for personal use or to extend the fraudulent trading scheme,” the CFTC said.
Ackerman deliberately and falsely claimed that he traded cryptocurrency and earned about 15% monthly. To cover up the fraud, the perpetrator provided clients with fake accounting reports containing “fictitious trading results and screenshots of assets under management.”
The defendant was found guilty and, in addition to the fine, was sentenced to five years of probation and one year of home confinement.
Earlier in May, CoinDeal investment project employee Brian Li was charged with defrauding $45 million.
In the same month, a U.S. court sentenced former Ubiquiti IT company employee Nicholas Sharp to six years in prison for extorting digital assets worth $2 million.