The U.S. Commodity Futures Trading Commission (CFTC) has resolved its enforcement action against Michael Ackerman following the issuance of a default judgment on digital currency fraud charges.
In a press release, CFTC confirmed it instituted criminal proceedings against Ackerman following allegations that he operated a fraudulent investment scheme. Ackerman’s scheme involved misrepresenting to the public that he was a profitable digital currency trader, netting monthly returns of over 15%.
Lured by his claims, over 150 individuals invested nearly $33 million in his scheme, in which Ackerman misappropriated two-thirds of the sum for his personal use. The CFTC says that to keep the scheme running, Ackerman resorted to document falsification to allay the investors’ fears.
“However, Ackerman was not a successful trader, and to conceal the fraud he provided customers with false accounting statements, newsletters containing false trading returns, and fictitious screenshots of the amount of money under management,” according to the commission.
The U.S. District Court for the Southern District of New York ordered Ackerman to pay $27 million in restitution to victims and another $27 million as a civil monetary penalty for operating the scheme. Per the judgment, Ackerman was slammed with a lifetime ban on commodity trading and precluded from registering with the CFTC.
In 2022, U.S. authorities instituted criminal action against Ackerman, culminating in a one-year house arrest, a five-year probation period, and an order to pay $31 million in restitution.
“The CFTC cautions that orders requiring payment of funds to victims may not result in the recovery of any money lost because wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure the wrongdoers are held accountable,” the CFTC said.
Cracking down on digital currency anonymity
The CFTC has been ramping up its vendetta against the digital currency industry, underscored by a string of enforcement actions against bad actors.
CFTC Commissioner Christy Romero made a call for digital currency service providers to avoid facilitating the use of mixers, given their increasing usage by bad actors. Romero cited the recent sanctioning of Tornado Cash by U.S. authorities following evidence that the platform was used to launder illegal funds.
“It is possible for all crypto companies to distance themselves from mixers and anonymity-enhanced technology, while still appropriately providing financial privacy for customers,” Romero said.
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