TL; DR Breakdown
- SEC charges Latvian to court for crypto fraud
- Auzins stole $7 million in an ICO
- Crypto fraud has become prevalent in the industry
Scams and hacks in the crypto sector are vices that would continue to soil the industry’s image even as regulators try to limit them. Over the last few years, reports have claimed that people are skeptical about entering the crypto market due to scams and hacks. Although there are methods of safeguarding oneself in the market, these scammers work overtime to breach platforms and swindle traders. In another win for the crypto sector against elements of ills, the United States SEC has charged a Latvian man to court on crimes relating to crypto fraud.
Auzins stole $7 million belonging to investors
According to a statement from the United States regulator, the individual arrested concerning crypto fraud offenses was said to have scammed investors of about $7 million. The SEC also mentioned that the scam was carried out via a shabby securities offering which the man ran on two platforms. A complaint was filed against the suspect, Ivars Auzins, by a district court in New York.
The United States regulator claimed that he ran a fraudulent initial coin offering and a cloud mining operation by the side. The SEC also claimed that Auzins carried out all his operations under a fake name, used a fake profile, and lied about affiliations with known entities to defraud investors in and outside the United States. Auzins was also said to have mismanaged funds kept in his possession for investments by investors in and out of the country.
Crypto fraud has become prevalent in the industry
In the United States SEC filing, Auzins carried out these activities between January 2018 to March 2018. He was responsible for a huge list of fraudulent activities through the period, with a popular one being the ICO of Denaria. During the ICO, the suspect lied to investors that the debit card, just like all other cards, would allow them to save their tokens and spend them anywhere they want. In the end, Auzins disappeared with both funds from users of the platform and investors during the ICO.
Crypto scams have become very common in the crypto market in the last few months, with Bitcoin seeing a surge in value as the year draws to a close. Although regulation is pretty much everywhere at the moment, the illicit actors use the cover provided by anonymity in the crypto sector to carry out their activities. A recent report mentioned that traders lost about $82 million to crypto fraud in the last four months of last year. However, the figure has doubled since the start of this year. While more traders are now interested in investing in Bitcoin, they could be a target for illicit actors looking to perpetuate crypto fraud.