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The Securities and Exchange Commission launched a lawsuit again two advisory companies and their owner for running a Ponzi-like cryptocurrency scheme.
The firms operated for over four years and manage to raise nearly $4.4 million.
- The lawsuit is against Creative Advancement LLC and Edelman Blockchain Advisors LLC as well as their owner â Gabriel Edelman.
- The allegations claim that Edelman, through his companies, âfraudulently offered and sold securities, using false, misleading statementsâ from February 2017 to May 2021.
- The SEC believes he raised $4,390,000 from at least four investors during those four years.
- Edelman promised that these funds will be invested in cryptocurrencies, which would have been purchased at discounted promises.
- However, the Commission alleged he invested âonly a small portion of investor funds in digital assetsâ and used the majority to fund his âown personal benefit,â including paying off credit cards or sending money to family members.
- Additionally, the SEC asserted that Edelman operated a âPonzi-likeâ scheme, repaying early investors with some of the new investorsâ funds to âencourage their ever-larger investments.â
- The agencyâs lawsuit alleges Edelman committed securities fraud and requested the court to permanently restrain him from âengaging in the acts, practices, and courses of business alleged herein.â
- The SEC lawsuit, which claims that Edelman is currently residing in Spain, explained how one of the Ponzi-like moves worked:
For example, one Investor initially invested $50,000. Edelman returned $75,000 within a few months, and the Investor subsequently invested an additional $600,000. Edelman then returned $720,000 a few months later. After that, the Investor invested $1,000,000âbased on purported past performance and Edelmanâs promise that the Investor would receive a 15% return. Thereafter, Edelman did not return any funds to that Investor.
The post US SEC Sues Owner of Alleged Ponzi-Like Cryptocurrency Scam appeared first on CryptoPotato.
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