What just happened? In the latest example of why it’s always important to be wary of cryptocurrency scams, the Securities and Exchange Commission (SEC) has charged two siblings over defrauding investors out of more than $124 million with a fake crypto project called Ormeus Coin.
According to the SEC complaint, John and JonAtina (Tina) Barksdale offered and sold Ormeus Coin to investors on crypto trading platforms from June 2017 to the present day. They have been charged with “defrauding thousands of retail investors out of more than $124 million through two unregistered fraudulent offerings of securities involving” the digital token.
It’s alleged that John Barksdale held roadshows worldwide while his sister led the production of social media posts, YouTube videos, press releases, and other promotional materials.
The SEC says the pair falsely claimed that Ormeus Coin was supported by a $250 million global crypto mining operation and produced $5.4 million to $8 million per month in mining revenues. In reality, the pair had abandoned their mining operations in 2019 after generating less than $3 million in total mining revenue.
The complaint states that the Barksdales tried to “preserve the [mining operation] fiction” by displaying a “wallet of an unrelated third party showing more than $190 million in assets as of November 2021,” when the actual Ormeus wallets held less than $500,000.
The Ormeus Coin website is still up and running. It lists exchanges that offer the coin, which the site claims is built on Ethereum and powered by green energy.
“We allege that the Barksdales acted as modern-day snake-oil salesmen, using social media, promotional websites, and in-person roadshows to mislead retail investors for their own personal benefit,” Melissa Hodgman, associate director in the SEC’s Division of Enforcement, said in the statement.
The SEC civil suit filed in federal court in Manhattan accuses the siblings of violating federal securities laws and seeks injunctive relief, disgorgement plus interest, and civil penalties. Separately, federal prosecutors in Manhattan announced Tuesday that John Barksdale has been arrested and charged with criminal securities fraud.
https://www.techspot.com/news/93711-sec-charges-snake-oil-siblings-over-124-million.html
