A court in Illinois sided with the United States Commodity Futures Trade Commission (CFTC) and recognized two altcoins – Olympus (OHM) and KlimaDAO (KLIMA) as commodities.

Illinois Northern District Court Judge supported the CFTC in the case against Oregon resident Sam Ikurti and his company, Jafia, LLC. The CFTC deemed the company a Ponzi-like scheme. 

Judge Imposed a $120 Million Fine on Crypto Ponzi Scheme

In 2022, CFTC accused Ikurti and his colleague Ravishankar Avadanam of fraud and non-compliance with registration requirements. The case against Avadanam was dismissed in 2023 as part of an agreement with the regulator.

The Commission claimed that they organized the Ponzi scheme, which attracted about $ 44 million from at least 170 investors through the company’s website called Jafia LLC and YouTube videos. 

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Ikurti and Avadanama developed Jafia LLC, which claimed to bring customers up to 15% returns per annum. However, scammers spent all investor funds on the purchase of altcoins OHM and KLIMA.

Judge Mary Rowland agreed with the CFTC that Jafia, LLC, and its founders were involved in fraud. The defendants are now required to pay more than $120 million in compensation to all victims of the scheme. Specifically, this included $83.7 million in restitution and $36.9 million in disgorgement.

However, the most important point in the case was the court’s recognition of OHM and KLIMA as commodities.

“The order finds not only are Bitcoin and Ethereum commodities within the CFTC’s jurisdiction, but also “OHM and Klima, two non-Bitcoin virtual currencies … qualify as commodities,” CFTC said.

Due to this development, the price of OHM has increased by 0.71% in the past 24 hours despite the broader market downturn. Meanwhile, the price of KLIMA has also increased modestly by 0.47%.

Determining whether crypto assets are securities or commodities is a subject of lively debate. CFTC Representatives consider most cryptocurrency commodities, while the US Securities and Exchange Commission (SEC) believes that all of them are more likely to relate to securities. 

Read more: Who Is Gary Gensler? Everything To Know About the SEC Chairman

Representatives of the crypto industry believe that it is precisely because of disputes between the CFTC and SEC in the United States that cannot create a regulatory framework for the crypto market.