U.S. SEC Indicts Eight in $45M CoinDeal Scam

The creator of CoinDeal and seven other entities connected to the crypto investment scam which generated up to $45 million have been indicted by the United States Securities and Exchange Commission (SEC).

According to a Wednesday post by the SEC, Neil Chandran, Garry Davidson, Michael Glaspie, Amy Mossel, Linda Knott, AEO Publishing Inc, Banner Co-Op, Inc, and BannersGo, LLC were charged for the sales of unregistered securities to several investors.

“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,” the director of the SEC’s Chicago Regional Office Daniel Gregus said. The case was filed by the U.S. SEC in the U.S. District Court for the Eastern District of Michigan.

He continued “As alleged in our complaint, in reality this was all just an elaborate scheme where the defendants enriched themselves while defrauding tens of thousands of retail investors.”

Neil Chandran has been in custody since September 2022 under the U.S. Department of Justice for his involvement in a separate wire fraud case. Chandran used investors’ funds to invest in real estate amassing houses, luxury cars, and a boat; he is currently awaiting trial. 

Investors Promised Huge Returns in CoinDeal

Unsuspecting investors were made to believe that they would get unbelievably profits by plunging their funds into the blockchain technology CoinDeal which will then be sold in trillions of dollars to a group of wealthy and prominent buyers. Between January 2019 to 2022, Chandran, Davidson, Glaspie, Knott, and Mossel were spreading this phony information to investors.

They kept on misleading these investors, spreading lies about “the purported value of CoinDeal, the parties involved in the supposed sale of CoinDeal, and the use of investment proceeds.” Interestingly, no acquisition had been made nor had any fund been allocated to the investors. Altogether, about 10,000 victims were defended in the CoinDeal scheme.

Overall, the U.S. regulator is doing so much to clamp down on criminal activities in the crypto industry. Following the implosion of the FTX Derivatives Exchange, SEC has promised to raise the bar for crypto regulation this year.