SEC obtains $10M final judgment against Meta 1 Coin

abdelaziz Fathi

A North Carolina court has granted the US Securities and Exchange Commission’s motion for a default judgment against an initial coin offering (ICO) that bilked as much as $10 million out of investors excited by the possibilities of the fraud perpetrated by a former Washington state senator.

The securities regulators requested a default judgment against three companies and four individuals associated with Meta 1 Coin.

The SEC charged Robert Dunlap and Nicole Bowdler, who worked with former State Senator Dave Schmidt, with arranging an ICO scheme called “Meta 1 Coin” that touted lucrative investment returns. The SEC also charged the defendants with providing pool participants with false statements that misrepresented the ICO’s profitability claiming that it would yield a 224,923 percent profit in less than a year.

Schmidt served as a state senator in Washington from 2003 until his unsuccessful re-election campaign in 2006. No stranger to controversy, he was accused in 2011 with spending his campaign funds on personal use, including mortgage payments and associated fees for the condominium where he lived and ran the re-election operation. He also paid for travel to conferences not directly related to his campaign. Schmidt denied misusing any campaign dollars but was ultimately fined $10,000.

On top of SEC charges, prosecutors accused the ICO organizers of deploying elaborate tactics and numerous false statements, including that the Meta 1 Coin was backed by a $1 billion art collection, and it has appointed specialists who realize how to spot genuine artistic creations. The scam operatives further claimed that their token is backed by $2 billion of gold and that an accounting firm was auditing the gold assets.

Instead, they spent the pool’s monies to pay for their personal expenses, including a $215,000 Ferrari, cash withdrawals, hotel, casino and restaurant expenses, and payments for other personal items.

While the defendants rewarded investors for recruiting new participants, the SEC describes these entities as fledgling companies with little to no actual business operations and few prospects for profitable operations.

As explained in the order, the SEC also determined that Meta 1 Coin amounted to selling securities without filing a registration or qualifying for a registration exemption.

If convicted with wire fraud, each defendant could face up to 20 years in prison and a fine of $1 million while selling unregistered securities carries a maximum of five years in prison and a $250,000 fiscal penalty.

Read this next


Exberry’s Guy Melamed on paradigm shift with cloud-native exchanges at FIA Boca 2023

FinanceFeeds Editor-in-Chief Nikolai Isayev spoke with Guy Melamed about Exberry’s cloud-native exchange SaaS platform certified by AWS to bring about a paradigm shift in the industry at a time of cybersecurity concerns.

Retail FX

Playtech revenue grows to €1.60 billion in 2022

Playtech plc (LSE: PTEC) reported solid financial results for the fiscal year 2022 as B2B growth and Snaitech’s record performance pushed it towards large gains in revenue and net profit.

Digital Assets

Terra founder Do Kwon arrested in Montenegro

Terra (LUNA) co-founder Do Kwon, the South Korean entrepreneur facing charges over the $40 billion wipeout of the stablecoins he created, was reportedly arrested in the region of Podgorica, Montenegro.

Metaverse Gaming NFT

Orbs Ecosystem Developers Launch TON Access To The Public

The TON Access service provides reliable and decentralized RPC nodes to decentralized applications (dApps).

Digital Assets

Bybit celebrates listing of Arbitrum (ARB) token with $400K prize pool

“At Bybit, we recognize our responsibility to provide forward-thinking opportunities for our users and lead the way in supporting the proliferation of cryptocurrency and blockchain technology.”

Digital Assets

StormGain launches StormGain DEX, a non-custodial alternative to its centralized exchange

StormGain DEX becomes accessible once a user connects their own non-custodial wallet and trades directly, with all orders settled on-chain.

Retail FX

OANDA launches CFDs on UK and US stocks for retail clients in emerging markets

“Interest in CFDs has been surging globally as they offer traders and investors the opportunity to profit from price changes without owning the underlying assets. CFDs give exposure to markets that are trending downward as well as upward, allowing traders to take positions even when volatility is high.”

Institutional FX

Bitpanda’s stocks, commodities, crypto now available to banks partnered with Visa

“We are excited to welcome Bitpanda to Visa’s Fintech Partner Connect Program. The partnership will assist banks to integrate an asset trading platform for crypto and other assets within their banking app.”

Industry News

Exchanges agree on global framework for designating stocks and shares as green

“Investors should be able to have greater visibility of issuers who have green activities in a way that is rigorous and that counters greenwashing. Exchanges strive to bring clarity, consistency, and rigor to the concept of green and to counter greenwashing.”