SEC Investigating $45 Million Blockchain-Based Crypto Scheme Fraud
According to the press release published on January 4, 2022, the US Securities and Exchange Commission “(SEC) charged the creator of the CoinDeal crypto scheme and seven others in connection with the $45 million fraud.”
The complaint by the SEC
The SEC has charged “Neil Chandran, Garry Davidson, Michael Glaspie, Amy Mossel, Linda Knott, AEO Publishing Inc, Banner Co-Op, Inc and BannersGo, LLC for their involvement in a fraudulent investment scheme called CoinDeal.” This fraudulent crypto scheme raised more than $45 million from “the sale of unregistered securities to tens of thousands of investors worldwide.”
The companies AEO Publishing Inc, Banner Co-Op, Inc and BannersGo, LLC were associated with the Chandran scam and are allegedly the recipients of investors’ cash and crypto payments.
The SEC filed a complaint in the US District Court for the Eastern District of Michigan. Where the SEC stated that “Chandran, Davidson, Glaspie, Knott and Mossel falsely claimed that investors could generate extravagant returns by investing in a blockchain technology called CoinDeal which would be sold for trillions of dollars to a group of prominent and wealthy buyers.”
From January 2019 to 2022, Chandran, Davidson, Glaspie, Knott and Mossel allegedly disseminated false and misleading statements to investors regarding the proposed value of CoinDeal, the parties involved in the supposed sale of CoinDeal, and the use of the investment proceeds. However, “no sale of CoinDeal occurred and no distributions were made to CoinDeal investors,” the complaint states.
It further alleges that all of the defendants “misappropriated millions of dollars of investor funds for personal use.” Meanwhile, Chandran used investor funds to buy cars, property and a boat.
Daniel Gregus, director of the SEC’s Chicago Regional Office, said “We allege that the defendants falsely claimed access to valuable blockchain technology and that the impending sale of the technology will generate investment returns of more than 500,000 times for investors.”
“As alleged in our complaint, this was in reality nothing more than an elaborate scheme in which the defendants enriched themselves while defrauding tens of thousands of retail investors,” he further added.
It should be noted that in June 2022, the US Department of Justice indicted Chandran in US District Court on three counts of wire fraud and two counts of money laundering for his involvement in this crypto-fraud scheme. He allegedly falsely promised extremely high returns under the assumption that one or more of his companies were about to be acquired by a consortium of wealthy buyers.
In addition, the SEC’s complaint seeks “disgorgement plus prejudgment interest, penalties and permanent injunctive relief against all defendants; officer and director claims against Chandran, Davidson, Glaspie, Knott and Mossel; and a conduct-based injunctive relief against Chandran.”
Andrew is a blockchain developer who developed his interest in cryptocurrencies while graduating. A keen observer of detail, he shares his passion for writing alongside being a developer. His backend knowledge of blockchain helps him bring a unique perspective to his writing
