US authorities on Tuesday filed criminal charges against a cryptocurrency executive and civil lawsuits against him and his sister, accusing them of defrauding retail investors of millions of dollars with a digital token known as ‘Ormeus Coin.
In documents filed in Manhattan federal court, the Justice Department says John Barksdale lied about the value and profitability of Ormeus Coin’s mining assets, including that the coin was backed by a $250 million mining operation. generating over $5 million in monthly revenue.
Barksdale and his sister JonAtina (AKA Tina) Barksdale were apart accused by the Securities and Exchange Commission for making fraudulent unregistered offers of Ormeus Coin.
The SEC said the Barksdales since 2017 have raised $124 million from more than 20,000 investors through their multi-level marketing firm Ormeus Global SA, and spent millions on travel, real estate and other personal expenses. .
Authorities said the siblings promoted Ormeus Coin through roadshows and social media, as well as a jumbotron in Manhattan’s Times Square proclaiming, “A cryptocurrency mining farm of $250 million revealed during a legal audit by Ormeus Coin”.
The Barksdales “acted like modern-day snake oil salesmen” by misleading investors, Melissa Hodgman, associate director of the SEC’s Enforcement Division, said in a statement.
The Barksdales’ attorneys could not immediately be identified.
John Barksdale has been arrested and faces up to 65 years in prison for securities fraud, wire fraud and conspiracy, according to the Department of Justice.
The two defendants are U.S. citizens, John Barksdale, 41, who lived in Thailand and JonAtina Barksdale, 45, in Hong Kong, the SEC said.
SEC Chairman Gary Gensler has called the cryptocurrency industry the “wild west” of finance and wants cryptocurrency exchanges to register with the SEC.
The White House has considered broad surveillance of the cryptocurrency market, in part to combat ransomware and other cybercrimes.
Joe Biden is expected this week to order the Justice Department and other federal agencies to study the possible ramifications of creating a U.S. central bank digital currency, a person familiar with the matter has said.