SEC charges 8 people tied to CoinDeal scheme

The U.S. Securities and Exchange Commission has filed charges against eight individuals involved in a crypto scheme called CoinDeal, according to a Jan. 4 press release.

The SEC said in its complaint that CoinDeal founder Neil Chandran operated a fraudulent crypto investment scheme along with other individuals and groups.

CoinDeal’s perpetrators raised over $45 million by selling unregistered securities to investors. They promised high returns and insisted that CoinDeal’s blockchain technology would be sold to wealthier buyers for trillions of dollars.

However, CoinDeal never sold the supposed blockchain technology, and no wealth was ever distributed to investors.

Daniel Gregus, the SEC’s regional director for Chicago, said:

“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.”

Those involved in the scheme also misused funds for personal expenses. The SEC notes that Chandran used funds to buy cars, property, and a boat. A past announcement suggests that Chandran had to forfeit at least 100 different assets.

Chandran has a long history of fraud. He was indicted by the U.S. Department of Justice on other charges related to CoinDeal last summer. In 2017, he was arrested in the U.S. on felony charges related to a firm called Sungame Corp. In 2015, he was charged by Canadian authorities in connection with a firm called Platinum Equities Ltd.

Today’s complaint from the SEC also names four other individuals involved in the CoinDeal scheme: Garry Davidson, Michael Glaspie, Amy Mossel, and Linda Knott. It additionally names three multi-level marketing groups: AEO Publishing Inc, Banner Co-Op, Inc, and BannersGo, LLC. The eight entities face assorted charges.

The SEC has recently undertaken numerous crypto-related cases. Yesterday, it announced charges against Cooper J. Morgenthau, a CFO who embezzled funds to invest in cryptocurrency. Today, the SEC attempted to intervene in a planned asset sale between Binance.US and Voyager Digital.

Other high-profile SEC cases over the past year have concerned FTX associate Caroline Ellison, celebrity and influencer Kim Kardashian, and the lending firm BlockFi.