The United States Securities and Exchange Commission (SEC) announced Thursday that it has filed charges against the founders of AML BitCoin, for conducting an unregistered offering for a token that they claimed would be a better version of Bitcoin.
The AML BitCoin scheme was piloted by Nevada-based NAC Foundation, its Chief Executive Officer Marcus Andrade, and political lobbyist Jack Abramoff, and raised at least $5.6 million from more than 2,400 investors from its token sales.
The unsuspecting investors received tokens that they could purportedly convert to AML BitCoin which the promoters portrayed as a higher version of Bitcoin with special features such as anti-money laundering, anti-terrorism and anti-theft technology built into the coin.
The founders also used other dishonest means to promote the AML BitCoin token, claiming among other things that it was already in negotiations with multiple government agencies to use the token, and that AML BitCoin would also be advertised during the Super Bowl event.
The SEC alleged that neither NAC nor its CEO could afford money for the claimed advert. Instead, the entities arraigned to publish independent articles with misleading statements about AML BitCoin.
Lastly, Andrade allegedly employed market manipulation to inflate the token’s trading volume, while diverting $1.1 million from the token offering for personal use.
Upon investigations by the SEC, political lobbyist Jack Abramoff has agreed to a settlement of approximately $55,100 in commissions and prejudgement interests associated with the crime.
Meanwhile, the SEC is seeking for a number of injunctions, disgorgement, and civil penalties, as well as injunctions prohibiting NAC and its CEO Andrade for getting involved with securities trading in the future.
In a similar development, Coinfomania reported in January that the SEC charged a Canadian convict and his partner for a $30 million ICO fraud.