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U.S. Court Issues Decisive Ruling Against Fraudster in Cryptocurrency Trading Scheme

Judge Imposes Penalties and Restitution in Significant CFTC Case

Sun, 02 Jul 2023, 11:49 am UTC

Setting a resounding blow to fraudulent activity in the world of cryptocurrency, U.S. District Court Judge Naomi Reice Buchwald ruled decisively against Ohio resident Michael Ackerman on June 28th. Ackerman, implicated in a significant deceptive digital asset trading scheme, found himself on the wrong end of a default judgment issued by the Commodity Futures Trading Commission (CFTC).

This ruling spelled out severe consequences for Ackerman, including a substantial financial penalty and a ban on future trading within markets regulated by the CFTC. Along with these, he was also stripped of the privilege to register with the regulatory agency. The judgment specifically calls for Ackerman to remit $27 million in restitution to his victims and pay an equal amount as a civil monetary fine, underscoring the severity of his fraudulent conduct.

Ackerman's fraudulent venture traces its roots back to February 2020, but his scheme spanned from August 2017 to December 2019. Rather than using investors' funds for trading digital commodity assets as he had pledged, Ackerman redirected most of the money for personal purposes or to keep the fraudulent trading scheme afloat.

He gained the trust of over 150 persons and entities, amassing a whopping $33 million from them. Yet, less than a third of this money was used for its promised purpose - trading. Instead, the majority of it was illicitly rerouted for Ackerman's personal gain or to keep the deceitful machine running.

In a recent keynote speech, CFTC Commissioner Christy Goldsmith Romero raised the issue of reducing cryptocurrency anonymity at City Week 2023 in London. Romero emphasized the vital role of collaboration between governments and the industry in mitigating the allure of cryptocurrencies for illegal financing. She stressed that effective risk management of digital assets is essential to maintain market integrity, national security, and financial stability.

The Commissioner pinpointed the challenge of verifying identities to reduce potential risks in the cryptocurrency market, noting that anonymity-enhancing technologies like mixers present substantial risks.

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