Investors Defrauded in Alleged Crypto Ponzi Scheme Submit Prejudgment Interest Claims

On Thursday, April 11, 2024, plaintiffs’ attorneys submitted damage calculations based on a previous court order in a cryptocurrency fraud case. The case involves accusations that Shawn Cutting and his company Crypto Traders Management LLC (CTM) misappropriated over $6 million in investor funds that were supposed to be placed in a pooled cryptocurrency investment fund.

According to documents filed earlier this year, Cutting attracted hundreds of investments from December 2017 to August 2020 by falsely representing that deposits in CTM were being pooled and invested in digital assets like Bitcoin and generating consistent returns. However, the court found no evidence any deposits were actually invested as represented, and banking records showed Cutting used the funds for personal expenses.

In March 2024, the U.S. District Court for the District of Idaho granted summary judgment in favor of plaintiffs David Powell and Merav Knafo against Cutting and CTM on federal securities fraud and state law claims. The latest filings provide calculations for compensatory and punitive damages against these defendants based on prejudgment interest rates in Idaho law.

For Powell, attorneys calculated total damages of $666,450.74 as of April 15, 2024. This includes his principal investment of $501,933 and over $164,000 in accrued interest since 2018 when he began investing based on a fluctuating statutory rate that currently stands at 10.25% annually. Similarly, damages for Knafo total $144,052.34, with a principal of $109,721.94 and $34,330.40 in interest accrued since 2019.

The plaintiffs’ counsel argued punitive damages of 0.5 times the actual damages would be appropriate, totaling around $250,966 for Powell and $54,860 for Knafo. They contend this is justified given the outright theft of funds and systematic lies told by Cutting over email to mislead investors about the status of their accounts and where the money was really going.

No further damages were requested against other defendants besides Cutting and CTM, including Cutting’s daughter Courtney Lata who also communicated with investors.

Please contact BlockTribune for access to a copy of this filing.