An Open Letter to Chairman Selig: The Eleven-Minute Phone Call That Cost Americans $209 Million

Dear Chairman Selig,

There is a number at the center of this case that I want you to consider: eleven minutes. That is the length of the ex parte phone call on May 10–11, 2022, in which the CFTC obtained an asset freeze, a receiver appointment, and a temporary restraining order against me, my companies, and my investors' funds. I was not present. I was not notified. I had no opportunity to respond. The court heard only from the CFTC.

The $209 million judgment that followed — entered on July 22, 2024 — traces directly to that eleven-minute call. The asset freeze prevented me from operating the fund, paying legal counsel, or defending myself with the resources I had built for my investors. The receiver, once appointed, took control of the fund's assets and began liquidating them. By the time I had the opportunity to present the blockchain evidence, the StoneTurn report, and the 69 investor letters to the court, the structural damage was done.

What the CFTC Told the Court in Eleven Minutes

The CFTC's basis for the ex parte orders was the complaint filed by Haan and Terrell and the declaration of their investigator, Heather Dasso. The complaint alleged that the fund "did not trade digital assets." The declaration drew a Ponzi scheme conclusion from bank records alone, without examining the blockchain. As Dasso later admitted under oath, she had never looked at the blockchain at the time she prepared her declaration.

The court had no way to know this. Ex parte proceedings exist for genuine emergencies — situations where advance notice would allow a defendant to destroy evidence or flee. The CFTC presented this case as such an emergency. In eleven minutes, without any adversarial testing of the evidence, the court issued orders that froze every asset associated with the fund and placed it under the control of a court-appointed receiver.

The Due Process Violation

The Fifth Amendment guarantees that no person shall be deprived of property without due process of law. The Supreme Court held in Mathews v. Eldridge that due process requires a balancing of the private interest affected, the risk of erroneous deprivation, and the government's interest. In this case, the private interest was substantial — the assets of an investment fund with 69 investors, built over four years. The risk of erroneous deprivation was high — the CFTC's central factual allegation was directly contradicted by publicly available blockchain data that its own investigator had never examined. The government's interest in proceeding ex parte, without notice, was never established beyond the boilerplate assertion of emergency.

The ex parte procedure might be defensible if the CFTC had conducted a thorough investigation before seeking emergency relief. It had not. It had examined bank records. It had not examined the blockchain. It had not examined the fund's SEC registration. It had not examined the fund's independent administrator, its auditor, or its legal counsel. It had not spoken to a single investor. It filed a complaint, obtained emergency orders in eleven minutes, and then conducted its investigation — in reverse order.

What Happened After the Freeze

After the asset freeze, the receiver began liquidating the fund's digital asset positions. The fund held tokens — YFI, Aave, SNX, KLIMA, and others — that had been carefully selected and managed over four years. The liquidation was not orderly. It occurred during a period of significant market volatility. The losses incurred during the forced liquidation became part of the "harm" attributed to me in the final judgment.

The investors who had written to the court saying they had made money, that they opposed the CFTC's actions, and that they wanted their assets returned — those investors watched the receiver liquidate their positions. The $209 million judgment does not represent money I stole. It represents the CFTC's calculation of what investors would have received if they had invested in the S&P 500 instead of my fund — a counterfactual damages theory applied to a fund whose investors, to a person, reported profitable returns and opposed the government's intervention.

The Seventh Circuit

The appeal is pending before the Seventh Circuit, Case No. 24-2684. The blockchain evidence, the Dasso deposition, the StoneTurn report, and the investor letters are all part of the appellate record. The constitutional questions — whether the ex parte procedure satisfied due process, whether the damages theory is legally supportable, whether the CFTC's jurisdiction over digital asset spot markets is valid — are before the court.

Chairman Selig, you have the authority to direct your agency's attorneys to engage with the appellate record honestly. You have the authority to examine whether the eleven-minute ex parte proceeding that initiated this case was consistent with the constitutional standards your agency is bound to uphold. You have stated publicly that the CFTC will end "regulation by enforcement." This case is a test of that commitment.

The record is public. The eleven minutes are documented. The $209 million judgment is real. And every investor who invested in my fund made money — until the CFTC intervened.

Respectfully,
Sam Ikkurty

All supporting documents, blockchain evidence, investor letters, and legal filings are available at samikkurty.com/legal-documents.