The Commodity Futures Trading Commission (CFTC) on August 11, 2022, filed a complaint against Rathnakishore Giri and SR Private Equity, LLC and NBD Eidetic Capital, LLC, which he controlled.

The complaint, seen by FX News Group, alleges that, from at least March 2019 through the present, Giri, individually, and while acting as an agent and controlling person of SR Private Equity and NBD Eidetic, engaged in a fraudulent scheme in which the defendants solicited and accepted over $12,000,000 and at least 10 bitcoin from more than 150 individuals or entities, to trade digital assets, mainly bitcoin, on behalf of the customers.

Beginning in or around March 2019, Defendant Giri solicited customers to invest with him personally by offering to trade digital assets on their behalf. On or about October 2020, Defendant Giri established NBD Eidetic and began to solicit customers to invest in various digital asset investment funds purportedly operated by NBD Eidetic. On or about April 2021, Defendant Giri established SR Private Equity and began to solicit customers to invest in various digital asset investment funds purportedly operated by SR Private Equity.

During the Relevant Period, Defendants made numerous false and misleading statements to current and prospective customers, including that Giri was an experienced and successful digital asset trader who obtained profitable returns averaging up to 5% to 10% per month.

During the Relevant Period, the defendants also omitted material facts in order to solicit prospective customers, such as that defendants misappropriated and commingled customer funds with Defendant Giri’s personal bank and digital asset trading accounts as well as the personal bank and digital asset trading accounts of Giri Subramani and Loka Pavani Giri. The defendants misappropriated customer funds to pay for Defendant Giri’s lavish lifestyle, which included yacht rentals, luxury vacations and luxury shopping trips.

Through this conduct and the conduct further described herein, the Defendants have engaged, are engaging, or are about to engage in fraudulent acts and practices in violation of the Commodity Exchange Act (“Act” or “CEA”), 7 U.S.C. §§ 1-26, and Commission Regulations (“Regulations”), 17 C.F.R. parts 1-190 (2021), specifically Section 6(c)(1) of the Act, 7 U.S.C. § 9(1), and Regulation 180.1(a), 17 C.F.R. § 180.1(a) (2021).

The complaint also alleges that Giri is liable for NBD Eidetic and SR Private Equity’s violations of the Act and Regulations, pursuant to Section 13(b) of the Act, 7 U.S.C. § 13c(b).

Defendants NBD Eidetic and SR Private Equity are alleged to be liable for Giri’s violations pursuant to Section 2(a)(1)(B) of the Act, 7 U.S.C. § 2(a)(1)(B) and Regulation 1.2, 17 C.F.R. § 1.2 (2021), because he was acting within the scope of his employment or office with these entities.

According to the Commission, unless restrained and enjoined by the Court, the defendants are likely to continue engaging in the acts and practices alleged in this Complaint. Accordingly, pursuant to Section 6c of the Act, 7 U.S.C. § 13a-1, the CFTC brings this action to enjoin the defendants’ unlawful acts and practices and to compel their compliance with the Act and the Regulations promulgated thereunder.

The CFTC also seeks civil monetary penalties and remedial ancillary relief from Defendants, including but not limited to, restitution to defrauded customers, disgorgement, pre- and post-judgment interest, and such other equitable relief as the Court may deem necessary.

The Commission also requests that the Court order Relief Defendants Giri Subramani and Loka Pavani Giri to disgorge funds they received from Defendants’ illegal activities and in which they have no legitimate interest.