One of the leaders of a Ponzi scheme that concerned a fictitious cryptocurrency has been ordered to pay $74m in fines.
The judgment comes greater than a yr and a half after the SEC raided the offices of an organization known as US Fine Investment Arts Inc (USFIA), stated to be related to the scheme. Gemcoin was alleged to be tied to amber mine holdings owned by USFIA, successfully appearing as a value-add to treasured stones prospects believed they’d obtain.
Yet, the SEC went on to argue in courtroom that the enterprise was largely fraudulent, and that CEO Steven Chen had diverted most funds to unrelated shell corporations. These shell corporations are believed to carry many of the ill-gotten positive factors and are listed as co-defendants by the SEC.
According to a judgment handed down on Monday, Chen and a cluster of associated entities – together with two actual property trusts, a consulting enterprise and a golf course holding firm – had been ordered to pay $51.9m in disgorged earnings. The courtroom additionally left Chen on the hook for $three.8m in prejudgment curiosity, in addition to a civil penalty price $16.7m.
Whether the SEC’s profitable case towards Chen and USFIA represents the final of the Gemcoin story, nevertheless, stays to be seen.
Among the small print put ahead in previous courtroom filings, together with a $100m class-action lawsuit, was the allegation that individuals tied to the Gemcoin scheme had shifted their assets elsewhere, suggesting that restoration efforts for affected traders may stretch on for a while.
Past studies additionally point out that the Federal Bureau of Investigation (FBI) has been investigating Gemcoin, although it is not instantly clear if the company has any grounds to file any fees.
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