The co-founder of two purported cryptocurrency investment funds has pleaded guilty to wire fraud as part of a scam and admitted to causing his victims to lose more than $30 million.

According to an unsealed indictment and a US Securities and Exchange Commission (SEC) complaint, both filed in the Southern District of New York, Michael Ackerman and two partners formed Q3 Trading Club and Q3 I in 2017, claiming to have created a proprietary trading algorithm that took advantage of volatility in cryptocurrencies while minimizing risks. 

The scam targeted doctors by using the connections of one of Ackerman’s partners, who was a surgeon. The funds were investment clubs that allowed members to contribute money they were told would be used to invest and trade in Bitcoin and other cryptocurrencies. As the fund’s chief trading officer, Ackerman personally controlled the primary trading account on an online cryptocurrency exchange.

Based on figures provided by Ackerman, who formerly worked as a UBS securities broker, the fund claimed its proprietary trading algorithm was earning approximately 15% in monthly profits. And by the end of 2019, Ackerman claimed the fund investment pool, which took in approximately $37 million in original investor contributions, had ballooned in value to approximately $315 million. However, the rates of return Ackerman reported were false, and the primary trading account he used never had an account balance that exceeded…

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