Alleged Diamond-Backed Cryptocurrency Shut Down By SEC, Calling Argyle Coin A Ponzi Scheme
Alleged Diamond-Backed Cryptocurrency Shut Down By SEC, Calling It A Ponzi Scheme
- Argyle Coin is a Ponzi scheme that has duped over 300 investors.
- The SEC is continuing the aggressive crackdown on illegitimate operations in the crypto industry.
The United States Securities and Exchange Commission (SEC) is the end-all of decisions for much of the financial world. A firm recently attempted to introduce the world to Argyle Coin, which was supposed to be backed by diamonds. However, after it accepted about $30 million in funding, the SEC discovered and revealed to the public that this project is no more than a Ponzi scheme.
Now that the SEC has singled out the Coin, principal Jose Angel Aman will have to deal with the SEC-imposed legal action, due to running a Ponzi scheme with funds from his diamond resale efforts. He previously started becoming suspicious after he had gotten involved with a few diamond-related companies, promising that he would bring in huge returns with the sale of wholesale diamonds. Based on the data available through Argyle Coin, it appeared that the token had completely backed itself with diamonds already. During the time that Argyle Coin remained active, there were a total of 300 investors in Canada and the United States.
Eric I. Bustillo, who is the director for the Miami Regional Office of the SEC, spoke on the recent press release, saying that Aman had been involved with “a complicated web of fraudulent companies in an effort to continually loot retail investors,” while continuing with a Ponzi scheme. The scheme only directed the money back to Aman’s own accounts, though Bustillo added that the SEC was able to uncover the scam before it went further. The SEC in the region is hoping to “bring justice to the harmed investors.”
In the indictment, Aman is named with the companies Natural Diamonds Investment Co. and Eagle Financial Diamond Group Inc. The two people that assisted him – Harold Seigel and Jonathan H. Seigel – were also included in the legal action. Aman was also accused of selling unlicensed securities, which is believed to be ongoing through the last few years.
The SEC has been more aggressive in their actions against operators who perform illegitimate activities in the cryptocurrency sector lately. Formal regulations are still being debated and changed, but this crackdown may help to keep some of these platforms in line. Last year, regulators reportedly launched an effort called Operation Cryptosweep, which targeted compliance efforts made by multiple initial coin offerings (ICOs).
Joseph P. Borg, the president of convener the North American Securities Administrators Association, made a statement last May in a press release. He commented that the “crypto criminals” of the world need to be aware of the regulators are working to protect investors, which will be done through “swift and effective action.”