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US Court Orders Operator of Digital Asset Trading Scam to Pay $54 Million

US Court Orders Operator of Digital Asset Trading Scam to Pay $54 Million

According to the Commodity Futures Trading Commission (CFTC), Michael Ackerman, the operator of an alleged fraudulent digital asset trading scheme, has been issued with an injunction order which bars him from trading in any CFTC-regulated markets or registering with the CFTC. The injunction also requires Ackerman to pay $27 million in restitution to defrauded victims and a civil monetary penalty of $27 million.

Only $10 Million Was Used to Trade Digital Commodity Assets

The Commodity Futures Trading Commission (CFTC) announced on June 28 that a default judgment granting a permanent injunction has been issued against Michael Ackerman, the operator of a fraudulent digital asset trading scheme. According to the commission, the injunction granted by Naomi Reice Buchwald, a judge with a U.S. District Court, bars Ackerman from trading on regulated markets and registering with the CFTC.

The statement also revealed that Ackerman, who was sentenced to five years of probation with a year of home confinement in Feb. 2022, will also be required to “pay $27 million in restitution to defrauded victims.” Ackerman was further hit with a civil monetary penalty of $27 million for operating the fraudulent scheme.

As per the CFTC statement, the case against Ackerman stems from his alleged role in operating a fraudulent scheme which “solicited and misappropriated funds to purportedly trade digital commodity assets.” Although he managed to successfully extract an estimated $33 million from some 150 individuals and entities, Ackerman only used $10 million to trade. According to the Commission, Ackerman is thought to have used the remaining funds for “personal use or to prolong the fraudulent trading scheme.”

Injunction Orders May Not Lead to Recovery of Funds

The CFTC also accused Ackerman of lying to his victims about the monthly returns he was generating via the fraudulent trading scheme. In order to hide the fraud, Ackerman allegedly provided his customers with “false accounting statements, newsletters containing false trading returns, and fictitious screenshots of the amount of money under management.”

Meanwhile, the CFTC also used the announcement to warn victims of fraudulent digital asset scams that injunction orders may not lead to the recovery of funds.

“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.

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