The Commodity Futures Trading Commission (CFTC) has filed an enforcement action alleging that Sam Ikkurty (aka Sreenivas I Rao), Ravishankar Avadhanam, and Jafia LLC, a company Ikkurty owns in Florida, with fraudulently soliciting at least $44 million to invest in a “so-called income fund” that sought to invest in digital assets and other instruments.
According to the CFTC,’s complaint, since at least January 2021, the defendants have solicited more than $44 million from at least 170 participants to purchase, hold and trade digital assets, commodities, derivatives, swaps, and commodity futures contracts.
The complaint further alleges that instead of investing the pooled participant funds as represented, the defendants misappropriated participant funds by distributing them to other participants, similar to a Ponzi scheme.
The complaint also alleges that the defendants transferred some participant funds to other accounts under their control and for their benefit. The defendants also transferred millions of dollars to an off-shore entity that, in turn, may have transferred funds to a foreign cryptocurrency exchange. None of these funds were said to have been returned to the pool.
The enforcement action also charges the defendants with operating an illegal commodity pool and failing to register as a Commodity Pool Operator.
The complaint also charges three funds owned and operated by the defendants, Ikkurty Capital LLC dba Rose City Income Fund, Rose City Income Fund II LP (Rose City), and Seneca Ventures LLC, as relief defendants.
The CFTC states that n May 11, 2022, the court signed an ex parte statutory restraining order freezing assets controlled by the defendants, preserving records, and appointing a Temporary Receiver.
The defendants were served on May 16, 2022, and a status hearing is scheduled for May 25, 2022.
The CFTC seeks restitution to defrauded investors, disgorgement of ill-gotten gains, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against further violations of the Commodity Exchange Act (CEA) and CFTC regulations.