SEC Charges Creator of CoinDeal Scam and Seven Others
- The SEC has charged Neil Chandran, Garry Davidson, Michael Glaspie, Amy Mossel, Linda Knott, and related firms for the CoinDeal scam.
- The alleged scammers apprached people to invest money in CoinDeal blockchain technology and raised $45 million from the same.
- It was promised that CoinDeal would be sold for trillions of dollars to wealthy individuals but no sale occurred.
- Chandran used the money to buy cars, real estate, and a boat.
The authorities in the United States have become increasingly skeptical of cryptocurrencies and digital assets, and it is clear from the recent swarm of charges that the Securities and Exchange Commission (SEC) has reigned down upon crypto firms and their founders. In the light of similar events, the securities regulator has charged the founder of CoinDeal, along with seven others, in connection with a $45 million fraud.
According to a press release from the SEC, the regulator charged Neil Chandran, Garry Davidson, Michael Glaspie, Amy Mossel, Linda Knott, AEO Publishing Inc., Banner Co-Op, Inc., and BannersGo, LLC, for their alleged “involvement in a fraudulent investment scheme named CoinDeal that raised more than $45 million from sales of unregistered securities to tens of thousands of investors worldwide.”
“We allege the defendants falsely claimed access to valuable blockchain technology and that the imminent sale of the technology would generate investment returns of more than 500,000 times for investors,” said Daniel Gregus, Director of the SEC’s Chicago Regional Office. “As alleged in our complaint, in reality this was all just an elaborate scheme where the defendants enriched themselves while defrauding tens of thousands of retail investors.”
As per the SEC’s complaint filed in the US District Court for the Eastern District of Michigan, the people involved in the scam, Chandran, Davidson, Glaspie, Knott, and Mossel, made false claims about the potential of investment in blockchain technology, CoinDeal, to investors and promised people that the technology will be sold to wealthy people for trillions of dollars. However, this wasn’t the case.
No sale of CoinDeal ever occurred while Chandran, Davidson, Glaspie, Knott, and Mossel “disseminated false and misleading statements to investors regarding the purported value of CoinDeal, the parties involved in the supposed sale of CoinDeal, and the use of investment proceeds” between January 2019 to 2022
The SEC also believes that together, the people involved in the CoinDeal scheme successfully “misappropriated millions of dollars of investor funds for personal use,” and reportedly, Chandran had purchased cars, real estate, and a boat using the same. It is also crucial to note that in June 2022, Chandran was indicted by the DoJ in the US District Court for the District of Nebraska “on three counts of wire fraud and two counts of monetary transactions in unlawful proceeds for his involvement in CoinDeal.”
“The SEC’s complaint seeks disgorgement plus pre-judgment interest, penalties, and permanent injunctions against all defendants; officer and director bars against Chandran, Davidson, Glaspie, Knott, and Mossel; and a conduct-based injunction against Chandran,” the statement read further.
Recently, popular celebrity Kim Kardashian, also came under the crosshairs of the SEC for the promotion of EthereumMAX (EMAX), a reportedly pump and dump crypto scheme. Moreover, the SEC and CFTC have increasingly started cracking down on crypto firms, and the latter recently charged Adam Todd, founder of crypto futures and spot market exchange Digitex, for multiple violations of the Commodity Exchange Act (CEA).