The US Securities and Exchange Commission (SEC) has charged three participants in the Bitcoiin2Gen cryptocurrency investment scheme with committing securities fraud.
According to the regulator, B2G attracted investors with promises of high returns on investments in its own cryptocurrency, Bitcoiin, which was distributed through an unregistered initial coin offering (ICO). The organizers sent investors brochures with false information, in which they stated that B2G would be available for mining and mining in April 2018, but by this time they had already stopped their activities. Thus, the fraudsters in the person of the founder Christian Krstic, as well as promoters John Demarre and Robin Enos managed to collect about $11 million, according to the lawsuit.
Krstic and Demarr are accused of violating anti-fraud and registration requirements in connection with the distribution of securities, Enos – of aiding their criminal activities. The U.S. Attorney's Office for the Eastern District of New York and the Department of Justice also filed criminal charges against Demarr.
"Demarr fraudulently embezzled at least $1.8 million – about half of the fiat amount he collected from investors – for personal needs, including buying cars and paying off credit card debts. Krstic, in turn, received over $9 million of investor funds in fiat currency and digital assets, " the SEC said. Enos received about $12,000 from Demarre for helping promote the project.
Last year, the SEC settled claims against actor Steven Seagal, who promoted B2G as a "brand ambassador" and failed to report receiving $157,000 in B2G tokens for his participation, imposing a fine on him. The SEC then reported that it considers Bitcoiin a security and continues to investigate. In the latest lawsuit, Segal's name does not appear.