SEC charges "snake oil" siblings over $124 million crypto scam

midian182

Posts: 7,882   +81
Staff member
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.

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Squid Surprise

Posts: 5,335   +4,980
Well, I know there will be the usual suspects who claim that this proves, once again, that crypto is solely for scamming...

This has nothing to do with crypto... these people simply chose it as the medium for their crimes... if not crypto, they'd have done something similar using something else.

It's NOT crypto - it's BAD PEOPLE!
 

psycros

Posts: 4,142   +5,768
Well, I know there will be the usual suspects who claim that this proves, once again, that crypto is solely for scamming...

This has nothing to do with crypto... these people simply chose it as the medium for their crimes... if not crypto, they'd have done something similar using something else.

It's NOT crypto - it's BAD PEOPLE!

But crypto makes it soooo much easier.
 

winjer

Posts: 423   +1,931
Well, I know there will be the usual suspects who claim that this proves, once again, that crypto is solely for scamming...

This has nothing to do with crypto... these people simply chose it as the medium for their crimes... if not crypto, they'd have done something similar using something else.

It's NOT crypto - it's BAD PEOPLE!

Crypto is a scam within it self.
And this is scammers, scamming, other scammers.

But yes, we can already expect some crypto bros, to say we just don't understand the tech and stuff.
 

QuantumPhysics

Posts: 6,308   +7,247
"I know there will be the usual suspects who claim that this proves, once again, that crypto is solely for scamming..."

It's more like a scam within a scam... Kinda like the movie "Inception".
 
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m4a4

Posts: 2,887   +3,695
TechSpot Elite
Well, I know there will be the usual suspects who claim that this proves, once again, that crypto is solely for scamming...

This has nothing to do with crypto... these people simply chose it as the medium for their crimes... if not crypto, they'd have done something similar using something else.

It's NOT crypto - it's BAD PEOPLE!
Yup.
But at this point I just think all those "tech" adults here (the ones watering down the term "scam") are just mad that because of their ignorance they missed out on making some legitimate money in the space (treating it as an asset). And they've decided that whining about projecting their dissatisfaction on it is the next best thing, instead of trying to understand it.

I wonder if they also think that the stock market is a giant scam too lol
 
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terzaerian

Posts: 1,262   +1,748
Have never heard of these losers.

Also odd choice to focus on SEC charging these two losers when the big news of the day is the EO that (sadly, I'm sure, to Techspot's resident trogs) did not ban crypto.
 

Phaetos

Posts: 99   +76
Paging CoffeeZilla, paging CoffeeZilla. You have a crypto scam on Line 1, it's urgent you take this call.