The SEC accuses the group of defrauding CoinDeal investors of $45 million

• The SEC charged five people and two businesses with defrauding investors of $45 million.
• The investment scheme promised impossibly high returns based on the trillion-dollar sale of blockchain technology.
• The alleged fraudsters used $45 million to buy cars, real estate and a boat.

Another alleged crypto scam was revealed on Wednesday when the Securities and Exchange Commission charged a group of individuals and several companies with defrauding investors of $45 million.

According to the SEC, CoinDeal was an investment scheme that promised tens of thousands of investors insane returns through the sale of blockchain technology that would yield billions of dollars.

Neil Chandran and others allegedly sold unregistered securities as part of the scheme, promising investors “extravagant” returns related to a unique blockchain technology called CoinDeal, which would eventually be sold to a wealthy group of buyers for an eye-popping sum in the trillions.

From at least January 2019 to 2022, the alleged fraudsters disseminated false and misleading statements to investors about the value of CoinDeal, the supposed sale of the blockchain, and the use of investment proceeds. In reality, the alleged fraudsters used the money raised from the investment scheme to buy cars, property and a boat.

“We allege 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,” said Daniel Gregus, director of the SEC’s Chicago Regional Office. “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.”

In June 2022, the Department of Justice indicted Chandran on three counts of wire fraud and two counts of money transaction in illegal proceeds for his involvement in CoinDeal.

Others charged in the CoinDeal scheme include Garry Davidson, Michael Glaspie, Amy Mossel, Linda Knott, AEO Publishing Inc., Banner Co-Op Inc. and BannersGo, LLC. The SEC complaint includes violations of the anti-fraud and registration provisions of the Securities Act and Exchange Act.

Chandran even went so far as to claim that the United States Department of Homeland Security was in on the supposed multi-billion dollar deal for CoinDeal.

The SEC complaint said: “Chandran routinely provided status updates on the alleged deal, including but not limited to: the involvement of foreign central banks and the US Department of Homeland Security; the latest board meetings of the consortium of wealthy buyers; the role of certain political figures, and the reasons to “temporary” delays until the end of the sale. These updates were designed to trick investors into continuing to invest in CoinDeal.”

The payout tables used by Chandran were so ridiculous that it is almost impossible to understand how he was able to lure tens of thousands of investors into the deal. For example, according to the SEC complaint, Chandran told potential investors that a $100,000 investment in CoinDeal would return $56.25 billion and a Bentley GT Convertible, while at the low end of the scale, a $500 investment would return a return of 12.5 million dollars.

Excuses by Chandran to CoinDeal investors as to why the multi-trillion dollar deal did not close as expected included “the engineer… called in sick yesterday.”