SEC charges 8 people linked with CoinDeal for Alleged $45M fraud

Key Takeaways:

  • The SEC charges the defendants with wire fraud and using investor funds to fund a lavish lifestyle.
  • Charges have been brought against eight people with ties to the cryptocurrency scheme CoinDeal.

Eight individuals associated with the cryptocurrency scheme CoinDeal have reportedly been charged, according to a press release from the U.S. Securities and Exchange Commission dated January 4. According to the SEC’s complaint, Neil Chandran, the creator of CoinDeal, orchestrated a fraudulent cryptocurrency investment scheme with the assistance of other people and organizations.

The culprits of CoinDeal offered unregistered securities to investors and made approximately $45 million. They stated that CoinDeal’s blockchain technology would be sold to wealthy customers for trillions of dollars and made high-return promises.

CoinDeal never offered to sell the purported blockchain technology, and investors were never paid a profit. Chicago’s regional director for the SEC, Daniel Gregus, stated:

“We allege the defendants falsely claimed access to valuable blockchain technology and that the imminent sale of the technology would generate investment returns of more than 500,000 times for investors. As alleged in our complaint, in reality this was all just an elaborate scheme where the defendants enriched themselves while defrauding tens of thousands of retail investors.”

The scheme’s participants also misappropriated money for personal expenses. According to the SEC, Neil used the money to purchase a yacht, a house, and several cars. According to a previous declaration, Neil allegedly had to give up at least 100 different assets. The U.S. Marshals and FBI seized 100 items, including luxury cars, real estate, and 39 Teslas, among other things. If Neil is found guilty in the Justice Department lawsuit, he may spend 20 years in federal prison.

Neil’s history of deception is extensive. The U.S. Department of Justice charged him with further CoinDeal-related violations in June last year. On felony allegations stemming from a company called Sungame Corp., he was detained in the United States in 2017. Canadian authorities accused him in 2015 in relation to a company called Platinum Equities Ltd.

Four additional parties who participated in the CoinDeal scheme are named in the SEC’s lawsuit that was submitted today and go by the names of Garry Davidson, Michael Glaspie, Amy Mossel, and Linda Knott. Also listed are AEO Publishing Inc., Banner Co-Op, Inc., and BannersGo, LLC, three multi-level marketing companies. The eight organizations are charged with a variety of charges.

The SEC has recently taken on several instances involving cryptocurrencies. It announced accusations against Cooper J. Morgenthau, a CFO who used stolen money to buy bitcoin, yesterday. The SEC tried to get involved in a scheduled asset sale involving Binance.US and Voyager Digital.

Over the past year, other prominent SEC lawsuits have involved FTX colleague Caroline Ellison, influencer and celebrity Kim Kardashian, and the lending company BlockFi.

Deep Dalal
Deep Dalal

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