Organizers of ICO Project Dropil Admit to Defrauding $1.9 Million
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The US Department of Justice has announced the founders of the cryptocurrency project Dropil (DROP), Jeremy McAlpine and Zachary Matar, have agreed to plead guilty to fraud in an initial coin offering (ICO) in which they raised about $1.9 million.

Dropil promoted itself as a developer of tools to automate the analysis, exchange and storage of cryptos. The organizers of the project promised users access to an automated trading bot (Dex), which was supposedly going to be based on various bots and selected strategies.

According to the prosecutor's office, McAlpine and Matar sold the DROP tokens to thousands of investors, promising to use the funds raised to trade cryptocurrencies using the bot. The DOJ claims none of the organizers have registered with the US Securities and Exchange Commission (SEC):

"To induce investors to purchase DROPs, McAlpine and Matar made a series of false statements to investors in a “White Paper” published on Dropil’s website and on its Twitter account, promoting the cryptocurrency’s supposed success."

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The Ministry of Justice has also highlighted the defendants issued false reports on Dex's profitability and made payments using DROP tokens to users, which created a false impression the platform was operating and making profits.

In addition, the organizers overestimated the amount of funds raised through the sale of DROP during and after the ICO. It is believed Dropil successfully attracted $54 million from 34,000 investors in the United States and other countries, but in reality, according to the investigation, the total amount of assets raised during the ICO did not exceed $1.9 million, and the number of investors 2,500. The Ministry of Justice writes:

"In total, the defendants obtained approximately $1,896,657 from 2,472 investors through the sale of approximately 629 million DROPs. But McAlpine and Matar did not use at least $1.6 million of the invested money as promised, using it instead to fund disbursements to themselves and their associates."

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