Seventh Circuit Appeal
CFTC v. Sam Ikkurty et al., U.S. Court of Appeals for the Seventh Circuit, Case No. 24-2684. Sam Ikkurty appeals the district court judgment on grounds including lack of CFTC jurisdiction over Ethereum spot transactions, the absence of any Ponzi scheme, and constitutional due process violations.
Case Summary
The CFTC filed its complaint on May 10, 2022, obtaining an emergency asset freeze the same day. After years of litigation, the district court entered judgment against Sam Ikkurty and co-defendants. Sam filed his notice of appeal in 2024. The appeal raises fundamental questions about the scope of CFTC jurisdiction over digital asset spot transactions — questions that will affect the entire cryptocurrency industry.
Key Arguments on Appeal
CFTC Lacks Jurisdiction Over Ethereum Spot Transactions
The CFTC's jurisdiction under the Commodity Exchange Act (CEA) extends to futures and derivatives — not spot transactions. Ethereum spot purchases are not futures contracts. The district court erred by treating spot ETH transactions as within CFTC jurisdiction.
No Ponzi Scheme — CFTC's Own Expert Found None
The CFTC retained StoneTurn Group as its forensic expert. StoneTurn's report does not use the word 'Ponzi' and does not conclude that investor returns were paid from other investors' capital. The district court's Ponzi finding was unsupported by the CFTC's own evidence.
885 Blockchain Transactions Prove Legitimate Operations
Every single investor received their promised returns. The 885 Ethereum blockchain transactions are a permanent, immutable public record. The CFTC's lead investigator admitted under oath she never reviewed the blockchain before filing her declaration.
Constitutional Due Process Violations
The asset freeze imposed at the outset of the case — before any hearing or adjudication — deprived Sam Ikkurty of his property without due process. The $209 million judgment was entered after the freeze made it impossible to mount a full defense.
False Declaration Used to Obtain Asset Freeze
The CFTC obtained the emergency asset freeze using Dasso's declaration, which she later admitted under oath was not based on any review of blockchain records. Using a declaration known to be unsupported to obtain an emergency freeze is a serious due process violation.
Filed Appellate Documents
Appellant's Reply Brief — 7th Circuit (Jan 2025)
Appellant's reply brief filed January 22, 2025 in the 7th Circuit, responding to the CFTC's opposition brief and reinforcing the constitutional and jurisdictional arguments.
- Responds to CFTC's jurisdictional arguments
- Reinforces constitutional rights violations
- Addresses CFTC's mischaracterization of blockchain evidence
Appellants' Brief — 7th Circuit (Nov 2024)
Appellants' opening brief filed in the United States Court of Appeals for the Seventh Circuit. Argues CFTC lacked subject matter jurisdiction over Ethereum SPOT transactions and violated defendants' constitutional rights.
- Challenges CFTC's claimed jurisdiction over Ethereum SPOT transactions
- Documents constitutional violations across multiple amendments
- Argues Congress never granted CFTC authority over spot crypto markets
Pending Appellate Filings
The following documents are expected as the appeal proceeds. This page will be updated as new filings become available.
CFTC Appellee's Brief
PendingThe CFTC's response brief defending the district court judgment. Expected to argue that the court had jurisdiction and that the Ponzi characterization was supported by the evidence.
Amicus Curiae Briefs
PotentialThird-party briefs from industry groups, legal scholars, or other interested parties. The jurisdictional question — whether the CFTC has authority over Ethereum spot transactions — is of broad significance to the crypto industry.
Oral Argument
Pending schedulingThe Seventh Circuit may schedule oral argument. If granted, this would be a significant opportunity to present the jurisdictional and constitutional arguments directly to a three-judge panel.
The Seventh Circuit's ruling on CFTC jurisdiction over Ethereum spot transactions will set precedent for the entire cryptocurrency industry. If the CFTC can assert jurisdiction over spot digital asset transactions — not just futures and derivatives — it would dramatically expand federal regulatory authority over every crypto exchange, fund, and individual holding digital assets.
Sam's case also raises the question of whether the CFTC can obtain emergency asset freezes based on declarations that were not supported by any review of the underlying evidence. The Dasso admission — that she never reviewed the blockchain before filing her declaration — is a fact pattern that should concern every defendant in a CFTC enforcement action.
Appellate counsel Jason Gottlieb of Morrison Cohen (New York) has written to CFTC Chairman Michael Selig requesting a settlement or vacatur of the judgment. That letter is publicly available on this site.