Ackerman is ordered to pay $27 million in restitution to victims and $27 million as a civil monetary penalty.
Attention is turned towards Michael Ackerman, an Ohio resident, who finds himself at the center of a landmark default judgment following accusations of a fraudulent crypto trading scheme.
On June 28th, the United States District Court for the Southern District of New York reached a groundbreaking ruling against Ackerman. Judge Naomi Reice Buchwald, who presided over the case, has issued a permanent injunction against him in a case brought forward by the Commodity Futures Trading Commission (CFTC).
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The decision outlines significant repercussions for Ackerman. His punitive sanctions include a complete ban on trading activities within any CFTC-regulated markets and a prohibition on registration with the CFTC.
The alleged fraudster from Ohio is also ordered to pay $27 million in restitution to victims and an additional $27 million as a civil monetary penalty. The judgment serves as a severe financial deterrent against fraudulent actions in the digital assets market.
Ackerman's case, dating back to February 11th, 2020, revolves around allegations of a fraudulent scheme operating from August 2017 to December 2019. He reportedly deceived investors by soliciting funds under false pretenses. Rather than using these funds for their intended purpose, Ackerman allegedly used most of the funds for personal use or to maintain the deceptive scheme.
The figures involved are startling, with over 150 individuals and entities believed to have entrusted Ackerman with no less than $33 million. On top of that, less than a third of this sum - less than $10 million - was used for trading.
Addressing the implications of the case, Christy Goldsmith Romero, a commissioner of the CFTC, spoke at London's City Week 2023. Romero urged to reduce cryptocurrency anonymity to mitigate associated risks. She stressed that governments and industry stakeholders need to collaborate to diminish the attractiveness of cryptocurrencies for unlawful financial activities.
The case represents a significant legal milestone in the realm of crypto trading. It underscores the urgent need for regulatory measures to prevent fraudulent schemes and maintain the integrity of the digital assets market.
This is not the first time malicious actors that defrauded crypto investors received a hefty penalty. At the end of April, a judge imposed a massive $3.4 billion fine in a Bitcoin-related fraud lawsuit.
