Ormeus Coin promoters charged over $124M crypto fraud

TL;DR Breakdown:

• The SEC charged Ormeus Coin promoter for defrauding investors of over $124 million. 
• They falsely claimed that the crypto project runs a $250 mining operation that generates at least $5 million monthly.

The US Securities and Exchange Commission (SEC) has charged the siblings – John and JonAnita (Tina) – behind “Ormeus Coin” for defrauding investors of over $124 million in two unregistered securities offerings.

Investors lose $124M in Ormeus Coin 

The complaint was filed with the US District Court for the Southern District of New York, in which the siblings were accused of offering Ormeus Coin and other crypto packages to thousands of retail investors between June 2017 to April 20218, under a multi-level marketing business dubbed Ormeus Global. They turned to roadshows and social media to promote the Ormeus Coin offering.

The siblings falsely claimed that Ormeus Coin was backed by one of the largest global cryptocurrency mining operations, besides owning a $250 million mining operation that generates $5.4 million to $8 million monthly. The SEC alleged that the Ormeus Coin promoters used investors’ funds for personal expenses while presenting a fake asset record of $190 million for the project in November 2021, which was only worth less than $500,000. 

“We allege that the Barksdales acted as modern-day snake-oil salesmen, using social media, promotional websites, and in-person roadshows to mislead retail investors for their own personal benefit,” said SEC’s official, Melissa Hodgman. 

The promoters were charged with violating the federal securities laws. The SEC also seeks injunctive relief, disgorgement plus interest, and civil penalties.

SEC pursue fraudulent offerings

Over the years, the SEC has been actively policing the cryptocurrency space against fraudulent offerings. In January, the watchdog charged the CEO of Crowd Machine Inc. and Metavine Inc. with fraud and unregistered ICO offerings.

Since 2013, the SEC has filed different lawsuits against 97 cryptocurrency companies, with penalties summing to $2.4 billion. 

“We will continue to vigorously pursue persons who sell securities in schemes to defraud the investing public no matter what label the promoters apply to their products,” Hodgman added.