CFTC accuses hedge fund manager of $12M BTC fraud

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US Commodity Futures Trading Commission (CFTC) As part of its plan to increase the transparency of hedge funds, it filed a lawsuit against the owner of two investment companies.

The CFTC filed a lawsuit in Ohio District Court againstlocal resident Rathnakishore Giri, who organized a Ponzi scheme using Bitcoin for $12 million. The regulator is demanding that Giri's two companies, SR Private Equity LLC and NBD Eidetic Capital LLC, be stopped and forced to return the money to investors.

“Managing a private equity fund with a focuscryptocurrencies, Geary invited investors to invest more than $12 million in cash and bitcoin in his funds, promising exceptional returns without the risk of financial loss,” CFTC Commissioner Kristin N. Johnson said in a statement.

She clarified that Giri violated the law onexchange commodities, which prohibits the manipulation of information and the use of “fraudulent schemes.” The CFTC commissioner added that Geary spent investors' money on a lavish lifestyle, "renting private jets and yachts, purchasing a vacation home, a luxury car and expensive clothing."

The supervisory authority requires from Giri not onlystop all activities related to the fraud, but also wants him to give up any monetary benefits “directly or indirectly” associated with the violation of the rules, including wages, commissions, loans, fees, income and any trading profits.

The lawsuit was filed the day afteras the CFTC, along with the US Securities and Exchange Commission (SEC), voted on a proposal that seeks to expand the reporting requirements of large cryptocurrency hedge funds.