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$33 Million Charged to Company for Fraudulent Digital Asset Scheme

$33 Million Charged to Company for Fraudulent Digital Asset Scheme

$33 Million Charged to Company for Fraudulent Digital Asset Scheme

On February 11th, Q3 Holdings, LLC and Q3 I, LP and its principal, Michael Ackerman, were charged with over $33 million in a fraudulent digital asset scheme by the U.S. District Court of the Southern District of New York. The Commodity Futures Trading Commission (CFTC) made public the complaint, alleging that the defendants performed fraud where they requested funds to supposedly trade digital assets and went on to embezzle the funds.

Only a few of the defendant’s customers’ funds were actually sent to digital asset trading accounts.  Customers’ were receiving fake accounting statements, newsletters and screenshots showing amount of money under Q3’s management. Over the span of August 2017 to December 2019, the defendants allegedly operated this scheme and made it difficult for anyone to transfer or take out customer funds. Principal, Michael Ackerman’s arrest, has been announced for wire and securities fraud, and misappropriation.

To read the press release in full: https://www.cftc.gov/PressRoom/PressReleases/8115-20?utm_source=govdelivery

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Kennyhertz Perry advises clients on a wide range of commodities and derivatives regulatory matters.  Kennyhertz Perry has experience in all types of derivative transactions and design structures to meet clients’ specific trading, financial, and/or credit needs.  The roots of the practice are in the commodities markets, where Kennyhertz Perry partner Braden Perry spent time as a Senior Trial Attorney with the Commodity Futures Trading Commission.  Our lawyers regularly advise our clients on compliance with the complex laws and regulations governing the securities and derivatives industries, including the Commodity Futures Modernization Act of 2000, the Commodity Exchange Act, the Gramm-Leach-Bliley Act, the Securities Acts of 1933 and 1934, the Investment Company Act of 1940, the Investment Advisers Act of 1940, the SEC and CFTC regulations, the rules of the various derivatives exchanges and clearinghouses and other industry self-regulatory organizations and the “Blue Sky” state securities laws. Keeping abreast of regulatory developments is imperative, and enables our lawyers to guide clients on comment-making about proposed legislation and regulation, provide ongoing operational and compliance counseling, and offer advice on appropriate modifications of transaction structure and documentation.

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