- The SEC on Thursday charged a Latvian citizen with defrauding at least $7 million from retail cryptocurrency investors.
- The agency filed a civil complaint against Ivars Auzins for running two fraudulent digital asset securities offerings.
- Auzins was behind an initial coin offering and a purported digital asset cloud mining program.
The Securities and Exchange Commission said Thursday it has charged a man for defrauding at least $7 million from hundreds of investors via two fraudulent offerings for digital asset securities.
The agency said it filed a civil complaint in New York against Ivars Auzins, alleging he was behind the unregistered offer and sale of digital asset securities in an initial coin offering as well as a purported digital asset cloud mining program.
Auzins, a citizen of Latvia, allegedly used fake names, profiles, and fictitious entities to carry out the fraud against US and foreign investors. The SEC claimed he misappropriated nearly all of the investor funds that were raised.
“As we allege, Auzins was engaged in a brazen scheme to defraud retail investors under the guise of profitable digital asset opportunities,” Kristina Littman, chief of the SEC’s cyber unit, said in a statement. “We will continue to detect and pursue those that seek to victimize investors in the digital asset space.”
With more retail and institutional investors taking part, the broader cryptocurrency market this year has grown to a valuation of roughly $1.1 trillion.
The SEC said Auzins’ scheme was part of an ICO of Denaro, a purported multi-currency debit card platform, from January 2018 through March 2018. He falsely claimed Denaro allowed users to store their digital assets in a secure digital wallet and then spend them “like any other debit card” which could be provided by a credit card issuer.
In addition, Auzins from April through July of 2019 allegedly offered the unregistered securities of a cloud mining program called Innovamine. The SEC said he falsely claimed investors could contribute digital assets to Innovamine, and then the company would perform mining activities and provide investors with a daily “automatic payout . . . in whichever coin they mine.”
The complaint was filed in US District Court for the Eastern District of New York.