Cryptocurrency

CFTC Demands $ 100M Fine for Organizer of Two Cryptocurrency Fraud Schemes

The Commodity Futures Trading Commission (CFTC) is demanding a fine of over $ 100 million from the organizer of two $ 33 million cryptocurrency fraudulent schemes.

In a motion filed with the Southern District Court of New York this week, the CFTC is seeking $ 27 million in damages and a $ 81 million fine from Michael Ackerman. The regulator demanded that this decision be made in absentia , since Ackerman had not appeared in court since the filing of the complaint.

Ackerman was the organizer of two cryptocurrency schemes: Q3 Trading Club and Q3 I LP, which, according to the CFTC, raised about $ 33 million from more than 150 investors. Ackerman claimed that he invested most of this money in the cryptocurrency market and used a special algorithm that maximizes profits.

“Ackerman has invested no more than $ 10 million of the $ 33 million raised from investors in cryptocurrencies. The profit generated by the algorithm was minimal at best, ”the CFTC said in a petition.

The commission claims that Ackerman faked screenshots of balance sheets and otherwise falsified information about where the investors’ money actually went. He used the funds to “buy and renovate a new home, pay for personal security, and buy over $ 100,000 worth of jewelry from Tiffany & Co. and the purchase of three cars. “

The US Securities and Exchange Commission (SEC) and CFTC filed complaints against Ackerman in February last year, but none have been fully resolved. The Justice Department also charged Ackerman with electronic fraud and money laundering.

Last spring, victims of the Q3 cryptocurrency pyramid filed a class action lawsuit against a subsidiary of Wells Fargo Bank. The plaintiffs argued that she ignored the actions of her employee James Seijas, who, as a financial advisor to Wells Fargo, lured $ 35 million from 150 investors. 

At the time, it was alleged that Seijas, along with certified surgeon Quan Tran and UBS Securities employee Michael Ackerman, created the Q3 Trading Club and Q3 I LP companies in 2017.

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