SEC charges Ivars Auzins for $7 million ICO scams
The SEC is taking its time, but it seems it is not turning a blind eye to what happened during the initial coin offering (ICO) craze.
The Securities and Exchange Commission has charged Ivars Auzins, a Latvian citizen, with a $7 million fraud through two separate fraudulent digital asset securities offerings.
Hundreds of U.S. and foreign investors lost their hard-earned money totaling at least $7 million to two initial coin offering scams.
Ivars Auzins used fake names, fictitious entities, and fraudulent profiles to perpetrate his schemes, and misappropriated nearly all of the investor funds that were raised, according to the SEC.
The golden age of scam ICOs
The first scheme fraudulently offered and sold unregistered digital tokens as part of an ICO of Denaro, a purported “multi-currency debit card platform”.
The complaint states that all of the claimed products or services being offered were fictitious, including the relationship with the credit card issuer.
The second scheme offered the unregistered securities of Innovamine, which purportedly offered a cloud mining program. The deal was to have investors contribute to Innovamine and then the company would perform mining activities and provide investors with a daily “automatic payout . . . in whichever coin they mine.”
Ivars Auzins misappropriated all of the funds in the ICO of Denaro, and nearly all of the funds raised in the Innovamine offering, said the financial watchdog.
Kristina Littman, Chief of the SEC Enforcement Division’s Cyber Unit, said: “As we allege, Auzins was engaged in a brazen scheme to defraud retail investors under the guise of profitable digital asset opportunities. We will continue to detect and pursue those that seek to victimize investors in the digital asset space.”
The Latvian citizen was charged with violating the antifraud and registration provisions of the federal securities laws. The SEC seeks permanent injunctions, including conduct-based injunctions, disgorgement plus prejudgment interest, civil penalties, and an officer-and-director bar against him.
SEC is coming for the crypto scams
The SEC is taking its time, but it seems it is not turning a blind eye to what happened during the initial coin offering (ICO) craze.
Last month, the regulator charged Ryan Ginster with conducting two unregistered and fraudulent securities offerings that raised over $3.6 million in cryptocurrency from retail investors.
The complaint regards a $3.6 million fundraiser in Bitcoin through two online platforms – MyMicroProfits.com and Social Profimatic.
According to the agency, Ryan Ginster promised astronomical rates of return by falsely claiming returns through, amongst other activities, purported “cryptocurrency trading and advertising arbitrage.”
The regulator alleges Ginster deceived investors in both offerings about how their funds would be used because Ginster misappropriated at least $1 million of the funds raised to pay personal expenses, including tax payments, housing expenses, and credit card bills.
