Ohio Man Accused of Crypto Scam, Court Orders to Pay $50M

A US District Court for the Southern District of New York fined an Ohio resident to pay more than $50 million for suspected involvement in a multi-million dollar cryptocurrency trading fraud, according to a report by the Block.

Ohio Man to Pay $27M in Fine and $27M in Compensation

As per the CFTC’s statement on Wednesday, Michael Ackerman of Alliance, Ohio won’t be permitted to sign up with the Commodity Futures Trading Commission or to trade on any of its trading platforms, is additionally ordered to pay $27 million in fines and $27 million in compensation to the victims. 

Not a Successful Trader

The CFTC said, “However, less than $10 million was used to trade digital commodity assets and the remaining funds were misappropriated for personal use or to prolong the fraudulent trading scheme,” while adding, that the Ohio man “was not a successful trader, and to conceal the fraud he provided customers with false accounting statements, newsletters containing false trading returns, and fictitious screenshots of the amount of money under management.”

Ohio Resident Misled Investors

In accordance with the agency, the Ohio Resident misled over his ability to trade digital commodities assets and generate a monthly profit of roughly 15% in order to attract new clients.

Notably, he received at least $33 million in deposits from more than 150 individuals and organizations after he “operated a fraudulent scheme that solicited and misappropriated funds to purportedly trade digital commodity assets.”

Crypto Fraud Cases on the Rise

By now, it should be clearly understood that cryptocurrency frauds are on the rise and generally target naïve consumers. However it’s also important to note that recently there have been more stringent regulations against them.

Recall that the U.S. Department of Justice established a specialized unit in September of last year with over 150 federal prosecutors to combat the use of cryptocurrencies in crimes including money laundering and terrorism financing as well as other unlawful actions related to cryptocurrencies. In addition, after allowing the business to grow freely for years, regulators have doubled the measures that are in place.