The US Securities and Exchange Commission has charged Ivars Auzins, a Latvian citizen, with defrauding "hundreds of retail investors." According to a press release, the fraudster raised at least $7 million through two separate "digital asset securities offerings." The regulator claims Auzins defrauded not only US, but also foreign investors through the unregistered offer and sale of securities in an initial coin offering for cryptocurrency cloud mining program.
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"Auzins allegedly used fake names, fictitious entities, and fraudulent profiles to perpetrate his schemes, and misappropriated nearly all of the investor funds that were raised," the SEC said.
One of the schemes — called Denaro — was represented to investors as a "multi-currency debit card platform." Auzins claimed that Denaro allowed customers to store their cryptocurrencies in a digital wallet and then spend assets "like any other debit card." The SEC saus all of the claimed products or services being offered were fictitious.
The other scheme called Innovamine offered a cloud mining program. Auzins reportedly claimed that investors could contribute cryptocurrencies to the platform so that the company would perform "mining activities" and provide investors with a daily "automatic payout . . . in whichever coin they mine." These promises were untrue, the regulator says, citing the complaint. The SEC charges Auzins with violating the antifraud and registration provisions of the federal securities laws.
Previously, the SEC filed a lawsuit against the founder of crypto pyramid BitConnect for conducting a fraudulent and unregistered placement of securities valued at $2 billion. According to the SEC, BitConnect founder Satish Kumbhani, promoter Glenn Arcaro and Future Money Ltd. organized a fraudulent scheme of 325,000 BTC.
The SEC also claims BitConnect lured investors with inaccurate claims of up to 40% monthly revenue with its "software volatility trading robot" that did not actually exist.
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