A Latvian citizen named Ivars Auzins is facing charges from the US Securities and Exchange Commission (SEC) for allegedly defrauding hundreds of retail investors, both US and foreign, out of at least $7 million through two separate fraudulent digital asset securities offerings.
In a press release, the SEC filed a civil complaint in the U.S. District Court for the Eastern District of New York. The investigation was conducted by Jon A. Daniels of the Cyber Unit and other officials are also taking part in the case.
Auzins, the perpetrator, deceived his victims with fake names and fraudulent profiles, first by conducting an unregistered sale of digital asset securities in an initial coin offering and then, using a fake digital asset cloud mining program to extort funds from them.
In the first scheme, through January 2018 and March 2018, he allegedly fraudulently offered and sold unregistered digital tokens as part of an ICO of Denaro, a supposed “multi-currency debit card platform.”
To successfully carry out his scheme, Auzins falsely claimed that users can store their digital assets and spend them “like any other debit card,” but it all turned out to be a lie as users could not see the results of the funds invested.
In the second scheme, from April 2019 to July 2019, Auzins allegedly fraudulently offered the unregistered securities of Innovamine, a fake cloud mining program.
He claimed the platform will perform mining activities for users who invest their funds in any coin of their choice and in turn benefit from a daily “automatic payout.”
However, the second scheme, like the first, proved to be a lie too as Auzins misused nearly all of the funds.
By violating the anti-fraud and registration provisions of the federal securities laws with the schemes he carried out, Auzins will be punished according to the court’s judgment.
Concerning the fraud case, Kristina Littman, Chief of the SEC Enforcement Division’s Cyber Unit said,
“As we allege, Auzins was engaged in a brazen scheme to defraud retail investors under the guise of profitable digital asset opportunities.” “We will continue to detect and pursue those that seek to victimize investors in the digital asset space.”
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