CFTC accuses Ohio man of operating $12 million ‘bitcoin Ponzi scheme’

The US Commodity Futures Trading Commission (CFTC) filed a civil enforcement action against an Ohio man this week, alleging that he fraudulently solicited over $12 million and at least 10 bitcoins from customers as part of an apparent Ponzi scheme. The man also used cash to fund a “lavish lifestyle” complete with yacht rentals, a luxury car and the use of a private jet, according to the complaint. 

Rathnakishore Giri and his companies, NBD Eidetic Capital, LLC and SR Private Equity, LLC., are accused of fraudulently soliciting money from 150 customers and misappropriating customer funds intended for digital asset trading. The complaint also charges Giri’s parents as relief defendants “in possession of funds to which they have no legitimate interest.”

“Giri seized upon the contemporary fervor for digital asset investment opportunities and lured unwitting investors to contribute over $12 million in cash and bitcoins to his funds with the promise of exceptional returns without the risk of financial loss,” CFTC Commissioner Kristin Johnson said in a statement.

According to the complaint, the defendants solicited and accepted the money to invest in digital asset investment funds beginning in March 2019. Giri and his companies are accused of making false statements, including profit guarantees. The defendants also allegedly told customers they could withdraw their funds at any time, which was false, according to the complaint. Further, Giri is accused of commingling customer funds with his own funds and bank accounts belonging to his parents, Giri Subramani and Loka Pavani Giri.

“Rather than using customer funds to acquire and trade digital assets as promised, Giri simply pocketed customers’ money, using their invested funds to bankroll his lavish lifestyle — characterized by use of private jets, yacht rentals, an extravagant vacation home, a luxury car and expensive clothing,” Johnson said.

The CFTC filed its civil enforcement action in the US District Court for the Southern District of Ohio on Thursday. The CFTC is seeking restitution to defrauded customers, disgorgement of ill-gotten gains and civil monetary penalties. The commission is also seeking permanent trading and registration bans and a permanent injunction against further violation of the Commodity Exchange Act and CFTC regulations. 

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