Judge labels 2 obscure altcoins as commodities in $120M Ponzi case

Tom Mitchelhill2 hours agoJudge labels 2 obscure altcoins as commodities in $120M Ponzi caseAn Illinois judge has sided with the Commodity Futures Trading Commission in a crypto fraud case, labeling two altcoins, OHM and KLIMA, as commodities.914 Total views3 Total sharesListen to article 0:00NewsOwn this piece of crypto historyCollect this article as NFTJoin us on social networksAn Illinois district court judge has sided with the United States Commodity Futures Trading Commission (CFTC) in a crypto Ponzi case, labeling two lesser-known altcoins as commodities.

The Ponzi scheme involved Sam Ikkurty from Oregon and several of his companies. The scheme defrauded victims by promising “steady returns” of 15% per year from investments in “digital asset commodities.”

These included Bitcoin (BTC) and Ether (ETH) but also Olympus (OHM) and KlimaDAO (KLIMA), which the order says are also qualified as commodities.

“Those virtual currencies fall into the same general class as Bitcoin, on which there is regulated futures trading,” said the CFTC.

KLIMA is the governance token of KlimaDAO, a decentralized autonomous organization that markets itself as solving “coordination” problems in climate finance.The price of Klima is down 99.9% from its 2021 all-time high. Source: CoinGecko

KLIMA is trading for just $3.55 at the time of publication, down 99.9% from its all-time high of $3,777 on Oct. 21, 2021, according to CoinGecko data.

OHM is the governance token of the OlympusDAO, an organization that aims to create a community-owned decentralized reserve currency.Oregon man to cough up $120 million for Ponzi scheme

In a July 3 statement, the CFTC said Ikkurty assured prospective participants he only invested in stable crypto assets and embellished stories of his prior successes to gain investors’ confidence.

However, instead of returning profits to participants, Ikkurty “ran something like a Ponzi scheme,” repeatedly misrepresenting the facts of his fund’s performance, intentionally omitting that the value of his fund fell by over 98.99% in a few months.

Additionally, the order found that Ikkurty transferred much of the funds to early investors to prevent them from taking on losses. This resulted in a shortfall of $20 million for investors in the purported carbon offset program.

The CFTC also noted that Ikkurty previously lost his entire personal Bitcoin holdings to a hack.

Judge Mary Rowland ordered more than $83.7 million in restitution and $36.9 million in disgorgement to be paid by Ikkurty.

Related:KlimaDAO Japan to launch carbon credit marketplace with Progmat

The CFTC first accused Ikkurty and Ravishankar Avadhanam of committing fraud and failing to register with their agency in May 2022.

The CFTC said the pair used a website, YouTube videos and “other means” to solicit more than $44 million from at least 170 people to trade cryptocurrencies, derivatives and commodity futures contracts.

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