REJECTEDWALL #175
Sam Ikkurty
Posted April 14, 2026
PERMANENT LINKcftcsucks.com/175
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SAM IKKURTY — CONSTITUTIONAL RIGHTS ADVOCATE samikkurty.com
C A S E A N A L Y S I S
They Denied Everything. The Court
Gave the CFTC a $209 Million
Judgment Anyway.
Published at samikkurty.com/blog/they-denied-everything-summary-judgment-anyway |
Case No. 1:22-cv-02465 (N.D. Ill.) | 7th Cir. No. 24-2684
In American civil litigation, a summary judgment is supposed to be
reserved for cases where there is no genuine dispute of material fact. The
standard is not "we think the defendant is probably guilty." It is not "the
agency has a compelling narrative." It is: the facts are undisputed, and
the law requires judgment as a matter of law.
On August 8, 2022, my attorneys filed a 27-page Answer to the CFTC's
Complaint. We denied the core allegations. We denied the fraud
allegations. We denied the misappropriation allegations. We denied the
Ponzi scheme allegations. We raised ten affirmative defenses. We
demanded a jury trial.
The CFTC received a $209 million summary judgment anyway.
This post is a record of what we denied, what we proved, and why the
summary judgment standard was not met. I am publishing it because the
public record deserves to be complete — and because the CFTC's press
release is not the whole story.
C A S E A N A L Y S I S
They Denied Everything. The Court
Gave the CFTC a $209 Million
Judgment Anyway.
Published at samikkurty.com/blog/they-denied-everything-summary-judgment-anyway |
Case No. 1:22-cv-02465 (N.D. Ill.) | 7th Cir. No. 24-2684
In American civil litigation, a summary judgment is supposed to be
reserved for cases where there is no genuine dispute of material fact. The
standard is not "we think the defendant is probably guilty." It is not "the
agency has a compelling narrative." It is: the facts are undisputed, and
the law requires judgment as a matter of law.
On August 8, 2022, my attorneys filed a 27-page Answer to the CFTC's
Complaint. We denied the core allegations. We denied the fraud
allegations. We denied the misappropriation allegations. We denied the
Ponzi scheme allegations. We raised ten affirmative defenses. We
demanded a jury trial.
The CFTC received a $209 million summary judgment anyway.
This post is a record of what we denied, what we proved, and why the
summary judgment standard was not met. I am publishing it because the
public record deserves to be complete — and because the CFTC's press
release is not the whole story.
## What the CFTC Alleged
The CFTC's Complaint alleged, in summary:
1. That I fraudulently solicited and accepted over $44 million from at
least 170 investors
2. That I misappropriated participant funds — that is, that I stole the
money
3. That the funds operated as a Ponzi scheme, paying earlier investors
with later investors' money
4. That I made material misrepresentations about the funds' performance
and investment strategy
5. That I operated as an unregistered Commodity Pool Operator (CPO)
These are serious allegations. They are also allegations that we denied,
paragraph by paragraph, in a sworn legal filing.
## What We Denied — Paragraph by Paragraph
The following table shows the CFTC's core factual allegations and the
defendants' sworn responses, taken directly from the Answer filed August
8, 2022 (Dkt. #40).
| Paragraph | CFTC Allegation | Defendants' Answer |
|-----------|----------------|-------------------|
| ¶1 | Defendants "fraudulently solicited" $44M and "misappropriated
participants' funds" | "Denied." Defendants invested millions in
cryptocurrency assets and earned substantial income. All activity was
visible on the public Ethereum blockchain. |
| ¶2 | Defendants distributed funds "in a manner akin to a Ponzi scheme"
| "Denied." Funds were invested through a cryptocurrency exchange as
reflected on the public Ethereum blockchain. |
| ¶3 | Defendants violated the Commodity Exchange Act | "Denied." |
The CFTC's Complaint alleged, in summary:
1. That I fraudulently solicited and accepted over $44 million from at
least 170 investors
2. That I misappropriated participant funds — that is, that I stole the
money
3. That the funds operated as a Ponzi scheme, paying earlier investors
with later investors' money
4. That I made material misrepresentations about the funds' performance
and investment strategy
5. That I operated as an unregistered Commodity Pool Operator (CPO)
These are serious allegations. They are also allegations that we denied,
paragraph by paragraph, in a sworn legal filing.
## What We Denied — Paragraph by Paragraph
The following table shows the CFTC's core factual allegations and the
defendants' sworn responses, taken directly from the Answer filed August
8, 2022 (Dkt. #40).
| Paragraph | CFTC Allegation | Defendants' Answer |
|-----------|----------------|-------------------|
| ¶1 | Defendants "fraudulently solicited" $44M and "misappropriated
participants' funds" | "Denied." Defendants invested millions in
cryptocurrency assets and earned substantial income. All activity was
visible on the public Ethereum blockchain. |
| ¶2 | Defendants distributed funds "in a manner akin to a Ponzi scheme"
| "Denied." Funds were invested through a cryptocurrency exchange as
reflected on the public Ethereum blockchain. |
| ¶3 | Defendants violated the Commodity Exchange Act | "Denied." |
| ¶4 | Defendants operated as an unregistered CPO | "Denied."
Defendants did not trade in commodity interests. |
| ¶5 | Defendants engaged in manipulative and deceptive acts | "Denied."
|
| ¶6 | Defendants fraudulently obtained funds and are likely to dissipate
them | "Denied." Defendants "have neither fraudulently obtained any
funds nor misappropriated or dissipated them." |
| ¶16 | The fund's investment strategy was misrepresented | "Denied."
Fund Documents contain a complete and accurate statement of terms. |
| ¶17 | Defendants made false performance representations | "Denied."
Fund I generated significant positive returns up to September 2018. |
| ¶18 | Rose City misrepresented its investment model | "Denied." Fund II
did in fact buy, sell, and trade digital assets and generate returns through
proof-of-stake mining, as demonstrated by public Ethereum blockchain
data. |
| ¶19 | Defendants ran a Ponzi scheme | "Denied." Participant funds were
invested through a cryptocurrency exchange as reflected on the public
Ethereum blockchain. |
| ¶20 | Defendants transferred $18M to an offshore entity for personal
benefit | "Denied." Funds were transferred to Genie Technologies, a
cryptocurrency exchange, for the purpose of purchasing digital assets —
as reflected on the public Ethereum blockchain and as contemplated by
the Fund Documents. |
| ¶21 | Defendants solicited through YouTube videos | "Denied."
Defendants neither uploaded a YouTube video nor solicited participants
through a YouTube video. |
| ¶25 | Defendants misrepresented the fund's investment strategy |
"Denied." |
| ¶26 | Defendants misrepresented historical performance | "Denied." |
| ¶27 | Defendants misrepresented expected profits | "Denied." |
| ¶28 | Defendants misrepresented fee structure | "Denied." |
Defendants did not trade in commodity interests. |
| ¶5 | Defendants engaged in manipulative and deceptive acts | "Denied."
|
| ¶6 | Defendants fraudulently obtained funds and are likely to dissipate
them | "Denied." Defendants "have neither fraudulently obtained any
funds nor misappropriated or dissipated them." |
| ¶16 | The fund's investment strategy was misrepresented | "Denied."
Fund Documents contain a complete and accurate statement of terms. |
| ¶17 | Defendants made false performance representations | "Denied."
Fund I generated significant positive returns up to September 2018. |
| ¶18 | Rose City misrepresented its investment model | "Denied." Fund II
did in fact buy, sell, and trade digital assets and generate returns through
proof-of-stake mining, as demonstrated by public Ethereum blockchain
data. |
| ¶19 | Defendants ran a Ponzi scheme | "Denied." Participant funds were
invested through a cryptocurrency exchange as reflected on the public
Ethereum blockchain. |
| ¶20 | Defendants transferred $18M to an offshore entity for personal
benefit | "Denied." Funds were transferred to Genie Technologies, a
cryptocurrency exchange, for the purpose of purchasing digital assets —
as reflected on the public Ethereum blockchain and as contemplated by
the Fund Documents. |
| ¶21 | Defendants solicited through YouTube videos | "Denied."
Defendants neither uploaded a YouTube video nor solicited participants
through a YouTube video. |
| ¶25 | Defendants misrepresented the fund's investment strategy |
"Denied." |
| ¶26 | Defendants misrepresented historical performance | "Denied." |
| ¶27 | Defendants misrepresented expected profits | "Denied." |
| ¶28 | Defendants misrepresented fee structure | "Denied." |
| ¶29 | Defendants failed to disclose misappropriation | "Denied." |
| ¶30 | Defendants failed to disclose Ponzi-like payments | "Denied." |
| ¶31 | Defendants failed to disclose CFTC registration status | "Denied."
No registration was required. |
| ¶32 | Defendants omitted that the fund was not earning profits |
"Denied." |
| ¶33 | Defendants made misrepresentations to solicit investment |
"Denied." |
| ¶37 | Defendants did not transfer funds to buy digital assets | "Denied."
Fund II invested in digital assets through a cryptocurrency exchange as
reflected on the public Ethereum blockchain. |
| ¶41 | Defendants transferred $9.9M of participant funds to their own
accounts | "Denied." Fund II invested in digital assets through a
cryptocurrency exchange as reflected on the public Ethereum blockchain.
|
| ¶47 | Defendants transferred $23.9M to Jafia for personal benefit |
"Denied." Only the third-party fund administrator could transfer funds
from the Fund II account to Jafia, for payment of management and
performance fees as authorized by the Fund Documents. |
| ¶48 | Defendants made Ponzi-like distributions | "Denied." Only the
third-party fund administrator could transfer funds for payment of
distributions, which were a return of invested capital as provided for in
the Fund Documents. |
| ¶49 | Defendants transferred $9.2M to an offshore entity | "Denied."
Fund II transferred funds to Genie Technologies, a cryptocurrency
exchange, for the purpose of purchasing digital assets, as reflected on the
public Ethereum blockchain. |
| ¶60 | Defendants violated fraud provisions of the CEA | "Denied." |
| ¶61 | Defendants misappropriated participant funds | "Denied." |
| ¶67 | Defendants made untrue or misleading statements | "Denied." |
| ¶30 | Defendants failed to disclose Ponzi-like payments | "Denied." |
| ¶31 | Defendants failed to disclose CFTC registration status | "Denied."
No registration was required. |
| ¶32 | Defendants omitted that the fund was not earning profits |
"Denied." |
| ¶33 | Defendants made misrepresentations to solicit investment |
"Denied." |
| ¶37 | Defendants did not transfer funds to buy digital assets | "Denied."
Fund II invested in digital assets through a cryptocurrency exchange as
reflected on the public Ethereum blockchain. |
| ¶41 | Defendants transferred $9.9M of participant funds to their own
accounts | "Denied." Fund II invested in digital assets through a
cryptocurrency exchange as reflected on the public Ethereum blockchain.
|
| ¶47 | Defendants transferred $23.9M to Jafia for personal benefit |
"Denied." Only the third-party fund administrator could transfer funds
from the Fund II account to Jafia, for payment of management and
performance fees as authorized by the Fund Documents. |
| ¶48 | Defendants made Ponzi-like distributions | "Denied." Only the
third-party fund administrator could transfer funds for payment of
distributions, which were a return of invested capital as provided for in
the Fund Documents. |
| ¶49 | Defendants transferred $9.2M to an offshore entity | "Denied."
Fund II transferred funds to Genie Technologies, a cryptocurrency
exchange, for the purpose of purchasing digital assets, as reflected on the
public Ethereum blockchain. |
| ¶60 | Defendants violated fraud provisions of the CEA | "Denied." |
| ¶61 | Defendants misappropriated participant funds | "Denied." |
| ¶67 | Defendants made untrue or misleading statements | "Denied." |
| ¶68 | Defendants misappropriated funds in a Ponzi-like manner |
"Denied." |
Every core factual allegation in the CFTC's Complaint was denied. Not
some of them. All of them.
## What We Proved — The Ten Affirmative Defenses
Beyond denying the CFTC's allegations, we raised ten affirmative
defenses, each of which independently defeats the CFTC's claims. These
are not technicalities. They are substantive legal and factual defenses.
First Defense: The CFTC's claims fail because any alleged investor
reliance on solicitations is precluded by the Fund Documents —
specifically the Private Placement Memorandum and Subscription
Agreement — which every investor signed, which contained robust risk
disclosures, and which required each investor to acknowledge they were
relying solely on those documents.
Second Defense: The CFTC's claims fail because we relied in good faith on
the advice of attorneys, certified public accountants, auditors, fund
administrators, and other expert professionals at every stage of the funds'
operation.
Third Defense: The CFTC's claims fail because we fulfilled the stated
investment objective in the PPM — investing in digital assets and proof-
of-stake mining — as demonstrated by the public Ethereum blockchain.
The blockchain is a permanent, immutable, publicly verifiable record. It
does not lie.
Fourth Defense: The CFTC's claims fail because we did not wire any
funds from Fund accounts. Third-party fund administrators
independently calculated net asset values, calculated distributions to
investors, calculated performance and management fees, and paid them
"Denied." |
Every core factual allegation in the CFTC's Complaint was denied. Not
some of them. All of them.
## What We Proved — The Ten Affirmative Defenses
Beyond denying the CFTC's allegations, we raised ten affirmative
defenses, each of which independently defeats the CFTC's claims. These
are not technicalities. They are substantive legal and factual defenses.
First Defense: The CFTC's claims fail because any alleged investor
reliance on solicitations is precluded by the Fund Documents —
specifically the Private Placement Memorandum and Subscription
Agreement — which every investor signed, which contained robust risk
disclosures, and which required each investor to acknowledge they were
relying solely on those documents.
Second Defense: The CFTC's claims fail because we relied in good faith on
the advice of attorneys, certified public accountants, auditors, fund
administrators, and other expert professionals at every stage of the funds'
operation.
Third Defense: The CFTC's claims fail because we fulfilled the stated
investment objective in the PPM — investing in digital assets and proof-
of-stake mining — as demonstrated by the public Ethereum blockchain.
The blockchain is a permanent, immutable, publicly verifiable record. It
does not lie.
Fourth Defense: The CFTC's claims fail because we did not wire any
funds from Fund accounts. Third-party fund administrators
independently calculated net asset values, calculated distributions to
investors, calculated performance and management fees, and paid them
— as authorized by the Fund Documents. We did not control the fund
transfers.
Fifth Defense: The CFTC's claims fail because we did not act with the
state of knowledge or intent necessary to give rise to liability. No act or
omission was malicious, willful, wanton, reckless, or made with intent to
violate any statute. We acted in good faith, without scienter, and without
actual knowledge that any statement or omission was false or misleading.
Sixth Defense: The CFTC's claims fail because any alleged false
statements or omissions were immaterial.
Seventh Defense: The CFTC's claims fail because our conduct was in
compliance with, or authorized by, applicable laws and regulations.
Eighth Defense: The CFTC's claim for injunctive relief is unavailable
because there was no violation of the commodities laws and no likelihood
of future violations.
Ninth Defense: The CFTC's claim for disgorgement should not be granted
because we did not receive profits, ill-gotten gains, or any pecuniary
benefit derived from the alleged misconduct.
Tenth Defense: The CFTC's claims fail because we never operated as a
commodity pool operator and never traded in commodity interests.
Ten defenses. Each one a separate, independent basis for dismissal.
## What the CFTC's Own Investigator Admitted Under Oath
The most extraordinary fact in this case is not in the Answer. It emerged
during discovery.
The CFTC's lead investigator — the person responsible for building the
agency's case — admitted under oath that she never examined the
transfers.
Fifth Defense: The CFTC's claims fail because we did not act with the
state of knowledge or intent necessary to give rise to liability. No act or
omission was malicious, willful, wanton, reckless, or made with intent to
violate any statute. We acted in good faith, without scienter, and without
actual knowledge that any statement or omission was false or misleading.
Sixth Defense: The CFTC's claims fail because any alleged false
statements or omissions were immaterial.
Seventh Defense: The CFTC's claims fail because our conduct was in
compliance with, or authorized by, applicable laws and regulations.
Eighth Defense: The CFTC's claim for injunctive relief is unavailable
because there was no violation of the commodities laws and no likelihood
of future violations.
Ninth Defense: The CFTC's claim for disgorgement should not be granted
because we did not receive profits, ill-gotten gains, or any pecuniary
benefit derived from the alleged misconduct.
Tenth Defense: The CFTC's claims fail because we never operated as a
commodity pool operator and never traded in commodity interests.
Ten defenses. Each one a separate, independent basis for dismissal.
## What the CFTC's Own Investigator Admitted Under Oath
The most extraordinary fact in this case is not in the Answer. It emerged
during discovery.
The CFTC's lead investigator — the person responsible for building the
agency's case — admitted under oath that she never examined the
blockchain in a digital asset fraud case. She confirmed that she is not
aware of a single investor who lost money.
Read that again. The CFTC brought a $209 million fraud case involving a
fund that invested in digital assets on the Ethereum blockchain. The lead
investigator never looked at the blockchain. The blockchain — the
permanent, public, immutable record of every transaction — was not
examined.
We shared the fund's crypto wallet addresses with investors in regular
emails so they could verify the holdings themselves. The third-party
administrator independently calculated net asset values from the
blockchain data. The blockchain shows exactly where the money went.
The CFTC's investigator chose not to look.
## What Summary Judgment Requires — and What the CFTC Received
Under Federal Rule of Civil Procedure 56, summary judgment is
appropriate only when "there is no genuine dispute as to any material fact
and the movant is entitled to judgment as a matter of law."
A "genuine dispute" exists when "the evidence is such that a reasonable
jury could return a verdict for the nonmoving party." *Anderson v.
Liberty Lobby, Inc.*, 477 U.S. 242, 248 (1986). At the summary judgment
stage, the court must view all facts and draw all reasonable inferences in
favor of the non-moving party.
We denied every material allegation. We raised ten affirmative defenses.
We had evidence — the blockchain, the Fund Documents, the third-party
administrator's records, the StoneTurn Accounting — that directly
contradicted the CFTC's narrative. We demanded a jury trial.
The question is not whether the CFTC's version of events is more
compelling than ours. The question is whether a reasonable jury could
aware of a single investor who lost money.
Read that again. The CFTC brought a $209 million fraud case involving a
fund that invested in digital assets on the Ethereum blockchain. The lead
investigator never looked at the blockchain. The blockchain — the
permanent, public, immutable record of every transaction — was not
examined.
We shared the fund's crypto wallet addresses with investors in regular
emails so they could verify the holdings themselves. The third-party
administrator independently calculated net asset values from the
blockchain data. The blockchain shows exactly where the money went.
The CFTC's investigator chose not to look.
## What Summary Judgment Requires — and What the CFTC Received
Under Federal Rule of Civil Procedure 56, summary judgment is
appropriate only when "there is no genuine dispute as to any material fact
and the movant is entitled to judgment as a matter of law."
A "genuine dispute" exists when "the evidence is such that a reasonable
jury could return a verdict for the nonmoving party." *Anderson v.
Liberty Lobby, Inc.*, 477 U.S. 242, 248 (1986). At the summary judgment
stage, the court must view all facts and draw all reasonable inferences in
favor of the non-moving party.
We denied every material allegation. We raised ten affirmative defenses.
We had evidence — the blockchain, the Fund Documents, the third-party
administrator's records, the StoneTurn Accounting — that directly
contradicted the CFTC's narrative. We demanded a jury trial.
The question is not whether the CFTC's version of events is more
compelling than ours. The question is whether a reasonable jury could
have found in our favor. Given that the CFTC's own investigator never
examined the blockchain, and given that the blockchain shows the fund's
investments exactly as we described them, the answer is plainly yes.
We were entitled to have a jury decide this case. We were denied that
right.
## Why This Matters Beyond My Case
I am not writing this to relitigate my case in a blog post. I am writing this
because what happened to me is happening to others — and will continue
to happen unless the pattern is named and documented.
The CFTC has a structural incentive to bring high-dollar cases and obtain
large judgments. The agency's budget and reputation depend on
enforcement numbers. A $209 million judgment is a headline. The fact
that the defendant denied every allegation, that the lead investigator
never examined the blockchain, that no investor has been identified as
having lost money — these facts do not appear in the press release.
The asset freeze that preceded the judgment was itself the punishment.
Before any finding of liability, before any trial, before any jury heard a
single piece of evidence, my assets were frozen. I could not pay lawyers. I
could not run my business. I could not defend myself effectively. The
freeze was designed to make defense impossible — and it largely
succeeded.
This is not investor protection. This is a government agency using the
tools of civil enforcement as weapons against people who have not been
found guilty of anything, in proceedings where the standard of proof is
lower than criminal court and the defendant's ability to fight back has
been systematically eliminated.
examined the blockchain, and given that the blockchain shows the fund's
investments exactly as we described them, the answer is plainly yes.
We were entitled to have a jury decide this case. We were denied that
right.
## Why This Matters Beyond My Case
I am not writing this to relitigate my case in a blog post. I am writing this
because what happened to me is happening to others — and will continue
to happen unless the pattern is named and documented.
The CFTC has a structural incentive to bring high-dollar cases and obtain
large judgments. The agency's budget and reputation depend on
enforcement numbers. A $209 million judgment is a headline. The fact
that the defendant denied every allegation, that the lead investigator
never examined the blockchain, that no investor has been identified as
having lost money — these facts do not appear in the press release.
The asset freeze that preceded the judgment was itself the punishment.
Before any finding of liability, before any trial, before any jury heard a
single piece of evidence, my assets were frozen. I could not pay lawyers. I
could not run my business. I could not defend myself effectively. The
freeze was designed to make defense impossible — and it largely
succeeded.
This is not investor protection. This is a government agency using the
tools of civil enforcement as weapons against people who have not been
found guilty of anything, in proceedings where the standard of proof is
lower than criminal court and the defendant's ability to fight back has
been systematically eliminated.
The blockchain does not lie. The Fund Documents are public. The
StoneTurn Accounting is in the record. The CFTC's investigator's
deposition is in the record.
The truth is available. It just requires someone to look.
---
*Sam Ikkurty is the founder of Rose City Income Fund and a defendant in
CFTC v. Ikkurty et al., Case No. 1:22-cv-02465 (N.D. Ill.). The Answer to
Complaint referenced in this post was filed August 8, 2022 as Docket
#40. All quotations are taken directly from that filing.*
---
## Related Documents
The primary source documents referenced in this post are available in the
Legal Documents section of this site.
- Dkt. #40 — Answer to Complaint (Aug 8, 2022) — The full 27-page
Answer filed by defendants, including all paragraph-by-paragraph
denials and ten affirmative defenses.
- Expert Report — Charles R. Soha, CFE (StoneTurn
Group)_e43e746a.pdf) — Independent forensic accounting report
confirming no misappropriation of funds and documenting verified
investor returns.
- Heather Dasso Deposition Transcript — Sworn testimony of the CFTC's
lead investigator, including her admission that she never reviewed the
blockchain.
StoneTurn Accounting is in the record. The CFTC's investigator's
deposition is in the record.
The truth is available. It just requires someone to look.
---
*Sam Ikkurty is the founder of Rose City Income Fund and a defendant in
CFTC v. Ikkurty et al., Case No. 1:22-cv-02465 (N.D. Ill.). The Answer to
Complaint referenced in this post was filed August 8, 2022 as Docket
#40. All quotations are taken directly from that filing.*
---
## Related Documents
The primary source documents referenced in this post are available in the
Legal Documents section of this site.
- Dkt. #40 — Answer to Complaint (Aug 8, 2022) — The full 27-page
Answer filed by defendants, including all paragraph-by-paragraph
denials and ten affirmative defenses.
- Expert Report — Charles R. Soha, CFE (StoneTurn
Group)_e43e746a.pdf) — Independent forensic accounting report
confirming no misappropriation of funds and documenting verified
investor returns.
- Heather Dasso Deposition Transcript — Sworn testimony of the CFTC's
lead investigator, including her admission that she never reviewed the
blockchain.
Sam Ikkurty · samikkurty.com · All documents and evidence available at samikkurty.com/
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VERIFICATION RECORD
Submission trackF
StatusREJECTED
Posted2026-04-14T08:14:03.000Z
SHA-256 hash1acc757b5da1975e08dd5f55812ca2fadc571d54c6687bb0550a18dae0ee8541
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