On March 9th, US investigators charged a cryptocurrency developer and his sister with a cryptocurrency scam, accusing them of scamming individual investors via a fictitious cryptocurrency out of millions of dollars.
According to a release released by the US Securities and Exchange Commission (SEC) on Wednesday, John and JonAtina Barksdale used Ormeus Coin to scam thousands of investors. The siblings promoted Ormeus on cryptocurrency exchanges, as well as on YouTube and at roadshows, per the SEC.
According to the SEC, John and Tina defrauded thousands of retail investors out of almost $124 million via two unlicensed securities offerings showcasing the bogus cryptocurrency.
The pair is also accused of operating Ormeus Global, a multi-level marketing scheme that marketed subscription plans that contained Ormeus from June 2017 to April 2018.
According to Melissa Hodgman, associate director of the Division of Enforcement of the Securities and Exchange Commission, “we claim that the Barksdales behaved as modern-day snake-oil salesmen, misrepresenting retail investors through social media, promotional websites, and in-person roadshows.”
The Department of Justice (DOJ) claims that John deceived investors about the value and performance of Ormeus Coin’s mining assets, claiming that the cryptocurrency was underpinned by a $250 million cryptocurrency mining operation that generated more than $5 million in monthly income, as per paperwork filed in federal court in Manhattan, New York.
Mining was, therefore, halted in 2019, often to the dismay of many who had invested in the cryptocurrency already. To hide the truth that Ormeus was not being mined, the pair reportedly created fraudulent wallets.
In November 2021, the cryptocurrency enterprise reportedly duped investors by saying its vault wallet was valued at more than $190 million. The screen, on the other hand, was allegedly made with the help of a second website that showed the value of a wallet that is unconnected. The project’s actual wallets were not even worth $500,000, the SEC alleged. The counsel for the Barksdales could not be identified right away.
Hodgman went on to reassure that “we will continue to vigorously pursue individuals who sell securities in schemes to dupe the investing public, no matter what label the promoters attach to their products.”
John has been arrested and is looking at up to 65 years in prison on charges of securities fraud, wire fraud, and conspiracy, according to the Justice Department. Per the SEC, both accused are US citizens, with John, 41, and Tina, 45, who lived in Thailand and Hong Kong, respectively.
The Securities and Exchange Commission (SEC) has questioned whether prevalent crypto industry promotional activities are securities fraud and were in disbelief of their broadened use.