Altcoins
These Two Altcoins Are Commodities, Not Stocks: US Court
An Illinois court has sided with United States Commodity Futures Trade Commission (CFTC) and recognized two altcoins, Olympus (OHM) and KlimaDAO (KLIMA), as commodities.
The Northern District Court of Illinois judge sided with the CFTC in its case against Oregon resident Sam Ikurti and his company, Jafia, LLC. The CFTC found the company to be a Ponzi scheme.
Judge Imposes $120 Million Fine on Crypto Ponzi Scheme
In 2022, The CFTC has charged Ikurti and his colleague Ravishankar Avadanam for fraud and failure to comply with registration requirements. The case against Avadanam was dismissed in 2023 as part of a settlement with the regulator.
The Commission claimed that it had organised the Ponzi Schemewhich has attracted approximately $44 million from at least 170 investors through the company’s website called Jafia LLC and YouTube videos.
To know more: The 15 Most Common Cryptocurrency Scams to Watch Out For
Ikurti and Avadanama developed Jafia LLC, which claimed to bring clients up to 15% annual returns. However, the scammers spent all investors’ funds on the purchase of altcoins OHM and KLIMA.
Judge Mary Rowland agreed with the CFTC that Jafia, LLC and its founders engaged in fraud. The defendants are now required to pay more than $120 million in restitution to all victims of the scheme. Specifically, this included $83.7 million in restitution and $36.9 million in restitution.
However, the most important point of the case was the court’s recognition of OHM and CLIMATE as goods.
“The order finds that not only are Bitcoin and Ethereum commodities within the jurisdiction of the CFTC, but also ‘OHM and Klima, two virtual currencies other than Bitcoin… qualify as commodities,’” the CFTC said. She said.
Due to this development, the price of OHM has increased by 0.71% over the past 24 hours despite the broader market decline. Meanwhile, the price of KLIMA has also increased modestly by 0.47%.
Olympus (OHM) Price/performance ratio. Source: Being in Cryptocurrency
Determining whether cryptocurrencies are securities or commodities is a hotly debated topic. CFTC officials consider most cryptocurrencies to be commodities, while the U.S. Securities and Exchange Commission (SEC) believes that everyone is more likely to relate to headlines.
To know more: Who Is Gary Gensler? Everything You Need to Know About the SEC Chairman
Representatives of the cryptocurrency industry believe that it is precisely because of the disputes between the CFTC and the SEC in the United States that it is not possible to create a regulatory framework for the cryptocurrency market.
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