SEC Initiates Enforcement Action against Fraudulent Crypto Investment Scheme
In 2018, a crypto scheme called “Coindeal” surfaced which was originally launched by a person named Neil Chandran.
Amongst the promoters of the scheme were notable individuals Linda Knott, Garry Davidson, and Michael Glaspie.
The scheme was found to be nothing but a fraud i.e. another Ponzi crypto investment scheme. Despite being labeled as a fraud, the scheme somehow continued to attract crypto investors for four years up till 2022.
Finally, an action has been initiated against Coindeal including its creator, Chandran, and seven others. The authorities are after the masterminds behind the particular Ponzi scheme.
The investigation teams are currently looking into the matter and they will get to the bottom of the entire matter.
Their primary concern is to ensure that they find the culprits and the criminals behind the entire scheme and bring them to justice.
Specific Charges and Allegations
As per the Securities & Exchange Commission (SEC) of US announcement on 4th January 2023, SEC has charged the perpetrators behind Coindeal.
They have been booked in an alleged offense of public fraud to the tune of $45 Million. SEC noted that Coindeal had been attracting investors in the US without even obtaining registration from the authority concerned.
SEC described that the fraudulent firm of Coindeal collected funds exceeding $45 Million from investors in and outside the US. It also said that unregistered securities were sold to American as well as citizens of other countries.
SEC Breaks down Ponzi scheme of Coindeal
It was explained by SEC that Coindeal’s founder as well as promotors made false and bogus claims to investors.
They made attractive claims to ensure that the investors join the platform and spend more money on the program. This way, the Ponzi scheme was made a hit until the masterminds exploited the users’ funds.
Investors were told that investing through the scheme in the blockchain technology scheme would return them exquisite profits.
Investors were promised returns in millions on the pretext that ‘so-called technology’ would eventually be bought by the wealthy for trillions of dollars.
SEC also informed that Coindeal told investors that a prominent tech group is behind the project.
According to the SEC, none of the promised sales to investors were ever carried out nor were there any such thing in the first place.
SEC told that investors were simply made into believing the project was worth investing in. On the contrary, Coindeal was targeting investors so as to loot their money.
It also told that since its launch in 2022, none of Coindeal’s investors were paid anything.
Millions of dollars belonging to investors were embezzled by the scheme which was then personally used by Coindeal’s creator and promoters.
SEC also told that Chandran was specifically using investors’ money in buying luxury cars, a yacht, and posh properties.
Advertisers and Publishers Also Charged
While charging the operators and promoters of Coindeal, SEC also took an action against advertisers and publishers of adverts.
For instance, charges were also leveled by SEC against companies such as Bannergo, AEO Publishers, Banner Co-op, etc.
These companies were charged for their alleged involvement with the fraudulent scheme in promoting and advertising their business.
They have been accused of aiding, abating, and acting irresponsibly in helping the firm acquire investors from all over the world.
Daniel Gregus, who is the Director at the Chicago Regional Office of SEC, told that Coindeal was committing mega-scale investment fraud. He also said that the company was making false promises to investors of return huge profits.
He explained that Coindeal was telling investors their returns would be half a million times more than what they had invested originally.
Gregus also revealed that SEC has officially lodged a complaint against Coindeal under which actions have been initiated.
On the other hand, Chandran was accused of financial crimes by the Department of Justice, USA.