The U.S. Securities and Exchange Commission has indicted eight individuals involved in a cryptocurrency scheme called CoinDeal. January 4th Press release.
In its complaint, the SEC said CoinDeal founder Neil Chandran operated an illicit cryptocurrency investment scheme along with other individuals and groups.
CoinDeal perpetrators have raised over $45 million by selling unregistered securities to investors. They promised high returns, claiming that CoinDeal’s blockchain technology could be sold to wealthy buyers for trillions of dollars.
However, CoinDeal never sold the supposed blockchain technology and never distributed the wealth to investors.
Daniel Gregas, director of the SEC’s Chicago region, said:
“Defendants falsely claim access to valuable blockchain technology and claim that the technology’s imminent sale will yield investors more than 500,000 times their return on investment.”
Those involved in the scheme misused the funds for personal spending. The SEC notes that Chandran used the funds to purchase cars, real estate and boats. According to past announcements, Chandran had to confiscate at least 100 different assets.
Chandran has a long history of fraud.he was indicted by the U.S. Department of Justice Other charges associated with CoinDeal last summer. In 2017, he was arrested in the United States on felony charges related to his Sungame Corp company. In 2015, he was indicted by Canadian authorities in connection with a company called Platinum Equities Ltd.
Today’s complaint from the SEC also names four other individuals involved in the CoinDeal scheme. Garry Davidson, Michael Glaspie, Amy Mossel and Linda Knott. Further cites his three multi-level marketing groups: AEO Publishing Inc, Banner Co-Op, Inc, and BannersGo, LLC. Eight entities face different charges.
The SEC has recently filed a number of cryptocurrency-related lawsuits. Yesterday, it announced an indictment against CFO Cooper J. Morgenthau for embezzling funds to invest in cryptocurrencies. Today, the SEC tried to intervene in an upcoming asset sale between Binance.US and Voyager Digital.
Other high-profile SEC lawsuits over the past year involved FTX associate Caroline Ellison, celebrity and influencer Kim Kardashian, and lender BlockFi.