Category

Fraud

Category

On May 19, 2023, the United States Department of Justice charged a Las Vegas man, Bryan Lee (“Lee”), for his alleged role in the CoinDeal fraud scheme, which involved more than 10,000 victims and $45 million. Lee has been charged with multiple counts of conspiracy, mail fraud, wire fraud and engaging in monetary transactions in criminally derived property. Lee is the third person to be charged by the DOJ in the scheme, after Neil Chandran …

On November 7, 2022, the US Attorney for the Southern District of New York announced that James Zhong (“Zhong”) plead guilty to one count of wire fraud for stealing over 50,000 Bitcoin (valued at the time of seizure at over USD 3.36 billion) from the now defunct Silk Road dark web marketplace. Zhong has not yet been sentenced but could face a maximum of 20 years in prison. This marks yet another major victory for…

The SEC has brought numerous cases in which it alleged that specific tokens were “securities” and that their offerings violated the securities laws. Those cases were typically brought against the issuers. However, the SEC upped the ante in a lawsuit it brought on July 21, 2022 in which the SEC declared that nine cryptocurrencies were “securities,” but in a case not brought against the issuers. The lawsuit is the SEC’s first insider trading case dealing…

Earlier this month, the United States Department of Justice (DOJ) announced charges against six individuals, in four separate cases, involved in fraudulent crypto related schemes and thereby further highlighted its commitment to protecting investors and consumers. The schemes involved the following alleged fraudulent acts; NFT Fraud (United States v. Le Ahn Tuan): A Vietnamese national and co-conspirators created an NFT called “Baller Ape” and shortly after the first day of trading, engaged in what is…

On January 5, 2022, the United States Securities and Exchange Commission announced its first enforcement action of the year concerning a fraudulent initial coin offering. This is the latest in a long list of enforcement actions by the SEC targeting unregistered digital asset offerings. The SEC charged Australian citizen Craig Sproule and two companies he founded, Crowd Machine, Inc. and Metavine, Inc., with making materially false and misleading statements in connection with an unregistered offer…

This is an update to our previous posts about the cases that the SEC and New York State Attorney General brought against Coinseed, a company that purported to offer a mobile investment application that enabled users to invest in digital assets.   On September 13, 2021, the NY Attorney General announced that her office had obtained a judgment permanently enjoining Coinseed’s operations.  It was a default judgment. According to the AG, after a preliminary injunction had…

In February, we reported that both the U.S. Securities and Exchange Commission and the New York Attorney General had brought proceeding against Coinseed, a company that purported to offer a mobile investment application that enabled users to invest in digital assets. On May 7, 2021, the AG’s office filed a motion asking the court for a temporary restraining order, a preliminary injunction, and the appointment of a receiver to immediately block Coinseed and its CEO from…

The U.S. Securities and Exchange Commission announced on March 11, 2021 that it filed an emergency action and obtained a temporary restraining order and asset freeze against Shawn Cutting of Sandpoint, Idaho. According to the SEC’s complaint, from October 2017 through at least May 2020, Cutting raised at least $6.9 million from over 450 investors by representing that he would pool investor monies into a fund that invested in various digital assets. The complaint alleges…

The U.S. Securities and Exchange Commission announced on December 28, 2020 that it had filed an emergency action and obtained an order imposing an asset freeze and other emergency relief against Virgil Capital LLC and its affiliated companies in connection with an alleged securities fraud relating to Virgil Capital’s flagship cryptocurrency trading fund, Virgil Sigma Fund LP. The Commission’s action alleges that the fraud was directed by Virgil co-founder, 23-year-old Stefan Qin, an Australian citizen…

On July 7, 2020, the Texas State Securities Board issued an Order against Mirror Trading International (MTI) to cease operations immediately, alleging the South African bitcoin and forex trading network is a multilevel marketing scam. According to the Order, Mirror Trading, controlled by Cornelius Johannes “Johan” Steynberg, is recruiting multilevel marketers to illegally sell fraudulent investments in a bitcoin and forex pool. Investors allegedly purchase the products by transferring bitcoin to Mirror Trading. Mirror Trading…