An Open Letter to Chairman Selig: 139 Newsletters the CFTC Never Read
Dear Chairman Selig,
For four years, every Friday, I sent my investors a newsletter. I called it Five Bullet Friday. It was not a marketing document. It was a transparent, real-time account of what the fund held, what it was doing, and how it was performing. Every issue is now publicly available on this website. I am writing to you because the CFTC's complaint against me — and the $209 million judgment that followed — rests on a theory that these newsletters, read together, make impossible.
What the Newsletters Document
The CFTC alleged that my fund "did not trade digital assets" and that investor distributions were funded by other investors' deposits — a Ponzi scheme. The newsletters document something different.
Issue #52, dated July 31, 2020, reports that the fund returned 145.66% in the month of July before fees. Issue #54, dated September 4, 2020, reports that the fund owned 429 YFI tokens — 1.4316% of the entire YFI protocol — and explains in detail how staking those tokens generates yield. Issue #57, dated September 25, 2020, reports that the fund returned 431.27% in the month of August 2020. Issue #66, dated November 27, 2020, reports that the fund grew by over 450% in November and had fully recovered October losses.
These are not vague claims. Each issue names specific tokens, specific wallet positions, specific protocol mechanics. Issue #54 explains that owning 1.4316% of the YFI protocol entitles the fund to 1.4316% of the protocol's earnings. Issue #72, dated January 8, 2021, reports that the total value of all crypto assets crossed $1 trillion for the first time and describes the fund's specific positions in that context. Issue #73, dated January 15, 2021, discusses Gary Gensler's nomination as SEC chairman and the fund's view of the regulatory landscape.
These newsletters were sent to accredited investors who had signed a Private Placement Memorandum, a Subscription Agreement, and a Limited Partnership Agreement. Every investor knew what the fund held. Every investor received monthly statements from Intertrust Group, the independent fund administrator. Every investor received audited financials from Richey May. The fund was registered with the SEC (CIK No. 0001842816).
What the CFTC Never Examined
The CFTC's lead investigator, Heather Dasso, admitted under oath that she never looked at the blockchain. She did not know what a PPM was when she raided my home. She did not know what a "2 and 20" fee structure meant. She did not know the fund served only accredited investors. She had never reviewed the PPM prior to the raid.
The CFTC filed its complaint on May 10, 2022. At that point, 885 on-chain transactions totaling $134.9 million in inflows and $130.4 million in outflows were publicly visible on Etherscan. The fund's SEC registration was publicly visible on EDGAR. The Five Bullet Friday newsletters — 139 issues documenting every significant position, every major market event, every distribution — were in the possession of every investor who received them.
The CFTC examined none of this. It examined bank records. It saw fiat wire transfers going to a cryptocurrency exchange (Genie Technologies, affiliated with ZebPay) and no fiat wire transfers coming back. It concluded this was a Ponzi scheme. It never asked where the value went when it left the fiat banking system and entered the blockchain. The answer — visible on Etherscan, documented in every Five Bullet Friday newsletter — is that it was converted into digital assets that generated returns.
The Investors Knew What They Owned
Sixty-nine investors filed letters with the court opposing the CFTC's actions. Not one complained of fraud. Not one reported a loss. The CFTC's own forensic expert, StoneTurn Group, concluded that a Ponzi scheme was mathematically impossible given the fund's structure and the evidence. The investors who received Five Bullet Friday every week for four years knew exactly what they had invested in. They said so, in writing, to a federal court.
The Question
Chairman Selig, you have stated publicly that the CFTC under your leadership will end "regulation by enforcement." The Five Bullet Friday newsletters are not legal arguments. They are contemporaneous business records — 139 issues, publicly available, documenting a fund that was doing exactly what it told its investors it would do. The CFTC obtained a $209 million judgment against that fund without examining those records, without examining the blockchain, and without a single investor complaint.
I am asking you to look at the record. All 139 newsletters are available on this website. The blockchain evidence is available at etherscan.io. The investor letters are available at samikkurty.com/legal-documents. The StoneTurn report is available at samikkurty.com/legal-documents/expert-report-stoneturn.
The record does not require interpretation. It requires only that someone read it.
Respectfully,
Sam Ikkurty