CFTC Files Charges Against Mastermind Of $12 Million Bitcoin Ponzi Scheme

The Commodities Futures Trading Commission (CFTC) has filed charges against an Ohia man and his companies for misappropriating more than $12 million from customers in a cryptocurrency-fueled Ponzi scheme.

CFTC Brings Charges

The CFTC has charged a man accused of running a multi-million dollar crypto scam.

Rathnakishore Giri of New Albany, Ohio, pretended to be a successful cryptocurrency trader in an elaborate scheme designed to dupe the unsuspecting public interested in crypto assets.

Through his two companies SR Private Equity LLC and NBD Eidetic Capital LLC, Giri allegedly promised investors he would re-invest their capital into investment funds to make them handsome returns — but this was all a lie.

The CFTC complaint alleges that more than 150 would-be investors contributed a whopping $12 million in cash plus at least 10 bitcoins to his funds from March 2019 to the present. As you can already predict, Giri used the money to fund a lavish lifestyle. 

“The complaint also alleges in their solicitations to customers, the defendants omitted material facts, including the defendants misappropriated customer funds to pay profits to other customers in a manner akin to a Ponzi scheme and also misappropriated customer funds to pay for Giri’s lavish lifestyle, which included yacht rentals, luxury vacations, and luxury shopping,” an excerpt of the complaint reads.

Giri apparently told the investors that they could cash out from their investment at any time but it was not true. He is accused of breaching commodities laws that forbid the manipulation of facts and “deceptive devices”.

The CFTC is also charging Giri’s parents, Giri Subramani and Loka Pavani Giri, as relief defendants in possession of funds to which they have no legitimate interest.

Repaying Investors

The Commission wants the court to force Giri to pay back the defrauded investors. Besides instructing Giri to stop all activities related to the scheme, the CFTC wants him to disgorge all his ill-gotten gains.

In her Friday statement, CFTC Commissioner Kristin N. Johnson noted that the Commission “rigorously surveys markets and enforces regulations by its mandate to protect customers,” but new investment products like crypto assets can pose “new challenges”. 

Nonetheless, this case illustrates that effective enforcement and consumer protection must remain one of their top priorities regardless of the asset class.