A company and two individuals were charged for operating a community pool fund illegally. They are accused of seeking $44 million fraudulently through an income fund that was supposed to invest in crypto assets. These defendants are named the company Jafia LLC and the individuals Ravishankar Avadhanam, and Sam Ikkurty. The status hearing is scheduled for 25 May 2022.
The three crypto funds named in this case include Seneca Ventures, Rose City Fund and Rose City fund II LP. The District Court froze all assets of these funds on 11 May 2022, according to the CFTC issued information.
The CFTC wants compensation for the defrauded investors. It wants to recover wealth the defendants solicited from the investors fraudulently. The case also seeks civil penalties and permanent bans on their registration and trading in the market. An injunction against future violation of the CFTC and CEA regulations has been sought.
The CFTC claims the accused entities used websites including YouTube to solicit funds over $44 million. About 170 participants invested money. They received the right to hold, trade and buy digital assets, derivatives, commodities, commodity future contracts and swaps.
The allegation against these entities is that they used the solicited money to generate a regular passive income with staking and trading by reallocating funds to new users. The whole plan made this process a Ponzi scheme. Defendants allegedly transferred millions to an offshore company which may have shifted up to $18 million funds further to an overseas cryptocurrency exchange.
After this official complaint, the websites named in the case are now parked, preventing other investors from falling prey to this alleged scam.. The accusation is that in place of investing funds in the digital assets, as promised, the defendants transferred those funds to their own personal accounts and new participants.