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

The Commodity Futures Trading Commission (CFTC) revealed that an injunction order had been issued against Michael Ackerman, who was behind an alleged digital asset trading scam.

As per the order, he would not be able to register with the CFTC or trade in any markets regulated by the authority.

In addition, he has been ordered to pay $27 million as a civil monetary penalty and defrauded victims will also be paid restitution of $27 million by the operator.

The announcement

On June 28th, the CFTC disclosed that a default judgment had been issued according to which a permanent injunction had been placed against Michael Ackerman.

A US District Court judge, Naomi Reice Buchwald, had granted the injunction and it would prevent Ackerman from trading in regulated markets.

According to the statement of the CFTC, Ackerman had been confined to his home for a year and had received a sentence of five years of probation in February last year.

Along with this, he would now have to pay the victims he defrauded a total sum of $27 million. Apart from that, he would also have to pay a civil monetary penalty of the same amount for operating the fraudulent scheme.

The scheme

The Commodity Futures Trading Commission (CFTC) said in its statement that the case had been filed against Ackerman due to the role he had played in running the fraudulent scheme.

The said scam had solicited funds from people for trading digital assets and they had later been misappropriated.

Ackerman had been able to obtain funds worth $33 million from almost 150 entities and individuals, but he had only conducted trading with $10 million.

The Commission said that it is believed that the remaining funds had been used by Ackerman for personal reasons and for prolonging his fake scheme.

Fund recovery

Ackerman was also accused by the CFTC of lying to the investors about the monthly returns he was making through his fraudulent trading scam.

In order to conceal the truth, he had allegedly shown the victims false accounting statements and fake screenshots of the amount of money that was being managed.

In fact, he had also presented newsletters that boasted fake trading returns. However, the CFTC also warned the victims in its statement.

It said that an injunction order was no guarantee that they would be able to recover the funds that had been involved in the digital asset trading scam.

The regulatory body said that this is due to the fact that the wrongdoers may not necessarily have sufficient assets or funds.

Therefore, in that case, it would not be possible to recover the funds that have been lost. The CFTC also added that it would continue to fight for protecting consumers and hold the wrongdoers accountable.

The digital asset trading industry has seen a number of such scams happen on a regular basis and hundreds of thousands of people all around the world have lost their funds in similar schemes.