U.S. SEC Sues Crypto Ponzi Scheme Operator After Selling Unregistered Securities
The U.S. Securities and Exchange Commission (SEC) is currently suing an alleged scammer that sold unregistered securities. At the same time, the accused individual named Daniel Pacheco has been conducting a Ponzi scheme and defrauding investors. The information was released by the regulatory agency a few days ago.
Investor Accused of Violating Securities Laws
According to the SEC, they are filing for an injunction against Mr. Pacheco for selling unregistered securities through IPro Solutions LLC and also through IPro Network LLC. The accused individual said to investors that they could convert the “points” received to PRO Currency.
Using this scheme, the fraudster was able to gather $26 million in funds from investors. At the same time, investors were also able to earn extra points or cash commissions by bringing new members to the platform. This is an open Ponzi scheme in which new users pay for older investors.
In a recently released statement, Michele Wein Layne, the Director of the SEC’s Los Angeles Regional Office, said:
“He enticed investors by offering them the opportunity to speculate in cryptocurrency, when in fact he was simply operating a pyramid scheme.”
With the money he gathered, he purchased a home of $2.5 million and a Rolls Royce. That means that he was not able to pay investor’s cash commissions and other bonuses. Additionally, Pacheco’s offers and packages constituted an unregistered sale of securities.
There have been different scams in the crypto space, including Ponzi and Pyramid schemes. We have recently written at Bitcoin Exchange Guide that scammers are stealing users’ funds through SIM swap methods that are very harmful for users with large sums of money on crypto exchanges.