Bitcoin, ETH, OHM, and Klima are defined as commodities in the CFTC lawsuit against the $44 million Ponzi scheme.

A judge in Illinois, USA, sided with the Commodity Futures Trading Commission (CFTC) and ordered a man from Oregon (a US state) and his company to pay over $120 million to the victims in a case accused of being a Ponzi scheme.

Sam Ikkurty and Jafia, LLC have provided “materially false information,” Judge Mary Rowland of the Northern District of Illinois Court said. The CFTC said Ikkurty and his company did not register with the agency and engaged in fraudulent conduct.

Notably, Judge Rowland also stated that the cryptocurrencies OHM and Klima are commodities under this order.

This order not only defines Bitcoin and Ethereum as commodities within the CFTC’s jurisdiction, but also 'OHM and Klima, two types of virtual currency other than Bitcoin… are also commodities, note that these virtual currencies belong to the same category as Bitcoin, with futures contracts managed by the CFTC," the Commission said.

OHM 1-day price chart. Source: TradingView

Both OHM (ranked 256) and Klima (ranked 745) are small cryptocurrencies compared to Bitcoin, Ether, or Dogecoin. However, determining which asset is a security, under the jurisdiction of the U.S. Securities and Exchange Commission (SEC), or a commodity, under the jurisdiction of the CFTC, is still a debate. For example, CFTC Chairman Rostin Behnam has said that Ether is a commodity, while SEC Chairman Gary Gensler has said that most cryptocurrencies are securities and has not been straightforward about classifying Ether.

KLIMA price chart 1 day. Source: TradingView

Judge Rowland’s decision considers OHM and Klima as commodities that may not have much value other than establishing CFTC’s jurisdiction in the case.

“I don’t think that’s a big issue,” said James Brady, a partner at Katten Muchin Rosenman LLP. “The SEC could still consider both as securities later on.”

The case related to allegations of fraud and unregistered activities brought by the CFTC in 2022 against Ikkurty and Ravishankar Avadhanam. Avadhanam’s case was dismissed in 2023 pursuant to an agreement with the CFTC.

CFTC said the two individuals carried out a “Ponzi”-like scheme, raising approximately 44 million dollars from at least 170 investors through a website and YouTube videos to then hold and trade digital assets, derivatives, swaps, and futures contracts.

Jafia LLC has issued a crypto savings bond advertised with an annual interest rate of 18% for potential investors. However, Sam Ikkurty redirected the funds from these savings bonds into tokens such as OHM and Klima, and at one point used the funds raised from the investment purposes to pay off initial investors in a ‘classic Ponzi scheme’.