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The National Futures Association (NFA) has accepted the settlement offer submitted by Ikigai Strategic Partners, a Puerto Rico-based commodity pool operator, and its president, Anthony Robert Emtman, after being charged for conducting a prohibited transaction.

Although the charge was issued on April 29 by the Business Conduct Committee (BCC) of NFA, the $150,000 settlement offer was accepted on Aug. 20. 

As per the complaint, Ikigai Strategic permitted Ikigai Opportunities Master Funds, one of the pools the firm operates, to make “prohibited advance of pool assets to an affiliate that Emtman and another principal own and operate,” which is a violation of NFA Compliance Rule 2-45. 

Ikigai Strategic and Emtman were also charged for permitting Master Fund to “commingle its assets with the assets of another pool operated by a non-member affiliate of Ikigai Strategic,” failing to provide necessary disclosures to pool participants, and failing to comply with recordkeeping and reporting obligations. 

Finally, the commodity pool operator failed to supervise the firm’s operations and its employees. 

According to the April 29 filing, Ikigai Strategic’s Master Fund loaned $2.5 million worth of Bitcoins to a crypto lending company in two transactions — the first in October 2022 and the second in November 2022. 

NFA’s review discovered that Ikigai Strategic used the Master Fund’s Bitcoin as collateral for $1.4 million USDC existing credit with the crypto exchange. Emtman also confirmed that Ikigai Capital had an uncollateralized line of credit with the crypto exchange. 

After finding Ikigai Strategy and Emtman guilty, the NFA hearing panel has asked the parties to pay the “settlement fine within 30 days after the effective date of this decision.”