Release Number 8572-22

CFTC Charges Ohio Man and His Companies with Fraudulently Solicitating Over $12 Million and Misappropriation in a Digital Asset Trading Scheme

August 12, 2022

The Commodity Futures Trading Commission today announced it has filed a civil enforcement action in the U.S. District Court for the Southern District of Ohio against Rathnakishore Giri of New Albany, Ohio and his Ohio-based companies NBD Eidetic Capital, LLC and SR Private Equity, LLC. The complaint alleges that Giri and his companies fraudulently solicited over $12 million and at least 10 bitcoins from more than 150 customers and that Giri and his companies misappropriated customer funds intended for digital asset trading.

In addition, the complaint charges Giri’s parents, Giri Subramani and Loka Pavani Giri, as relief defendants in possession of funds to which they have no legitimate interest. 

In its continuing litigation, the CFTC seeks restitution to defrauded customers, disgorgement of ill-gotten gains, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against further violations of the Commodity Exchange Act (CEA) and CFTC regulations.

Case Background

The complaint charges that from approximately March 2019 through the present, the defendants engaged in a fraudulent scheme in which they solicited and accepted over $12 million and more than 10 bitcoins from at least 150 customers to invest in various digital asset investment funds purportedly operated by the defendants. According to the complaint, the defendants made numerous false and misleading statements in their solicitations to customers, including, guarantees of profits, and Giri’s supposed success as a digital asset trader. The defendants also told customers they would have the ability to withdraw their initial investment and alleged profits at any time, which was false. The complaint also alleges in their solicitations to customers, the defendants omitted material facts, including the defendants misappropriated customer funds to pay profits to other customers in a manner akin to a Ponzi scheme and also misappropriated customer funds to pay for Giri’s lavish lifestyle, which included yacht rentals, luxury vacations and luxury shopping. The complaint further alleges the defendants commingled customer funds with Giri and the relief defendants’ funds when the defendants transferred customer funds to Giri and the relief defendants’ personal bank and digital asset trading accounts. 

Division of Enforcement staff members responsible for this case are Dmitriy Vilenskiy, Karen Kenmotsu, Luke B. Marsh and Paul G. Hayeck.

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The CFTC has issued several customer protection Fraud Advisories and Articles that provide the warning signs of fraud, including one with the Securities and Exchange Commission to inform the public of possible risks associated with investing or speculating in virtual currencies or recently launched Bitcoin futures and options. [See CFTC/SEC Investor Alert: Funds Trading in Bitcoin Futures]   

The CFTC also strongly urges the public to verify a company’s registration with the CFTC before committing funds. If unregistered, a customer should be wary of providing funds to that entity. A company’s registration status can be found using NFA BASIC.

Customers and other individuals can report suspicious activities or information, such as possible violations of commodity trading laws, to the Division of Enforcement via a toll-free hotline 866-FON-CFTC (866-366-2382) or file a tip or complaint (need hyperlink) online or contact the CFTC Whistleblower Office. Whistleblowers are eligible to receive between 10 and 30 percent of the monetary sanctions collected paid from the CFTC Customer Protection Fund financed through monetary sanctions paid to the CFTC by violators of the CEA.