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On June 28, the Commodity Futures Trading Commission (CFTC) announced that Judge Naomi Reis Buchwald of the U.S. District Court for the Southern District of New York issued a default judgment that imposed a permanent injunction against Michael Ackerman, a resident of Alliance, Ohio.
Today a federal court ordered an Ohio man to pay more than $50M for a fraudulent digital asset trading scheme. Learn more: https://t.co/z0WOqXIqih
— CFTC (@CFTC) June 28, 2023
Ackerman is now prohibited from participating in any trading activity on CFTC regulated markets and is prohibited from registering with the CFTC. Along with these restrictions, the decision obliges Ackerman to pay $27 million in compensation to victims affected by his fraudulent digital asset trading scheme. In addition, Ackerman is forced to pay a $27 million civil monetary penalty, a significant financial consequence of his involvement in the fraudulent scheme.
Ackerman is accused of using a fraudulent scheme that extorted funds from individuals and legal entities under false pretenses. However, instead of using the funds for their intended purpose, he is alleged to have misappropriated most of the funds for personal use or to continue a fraudulent trading scheme.
The case filed by the CFTC dates back to February 11, 2020, when Ackerman was accused of orchestrating a complex scam that ran from August 2017 to December 2019. The complaint alleged that Ackerman used a scheme to raise funds for trading in digital goods. assets, but instead misappropriated the funds.
More than 150 individuals and entities are reported to have entrusted Ackerman with a total of at least $33 million. It is shocking that less than $10 million of the funds deposited was actually used for trading and the remainder was fraudulently diverted for personal use or to extend a fraudulent operation.
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During a keynote speech at City Week 2023 in London, Christy Goldsmith Romero, Commissioner of the CFTC, proposed reducing the anonymity of cryptocurrencies as a way to mitigate the risks associated with digital assets. Romero stressed the importance of governments and industry working together to address the attractiveness of cryptocurrencies for illicit funding.
She stressed that digital asset risk management is critical to maintaining market integrity, national security, and financial stability. Romero specifically mentioned the need to solve the problem of identity verification in order to minimize the risks of illegal financing in the cryptocurrency market, since the use of mixers and anonymization technologies creates significant potential risks.