SEC Charges 8 in $45M Crypto Investment Scheme: CoinDeal Founder Misused Funds

Posted on by Phillip

• The U.S. Securities and Exchange Commission has filed charges against eight individuals involved in a crypto scheme called CoinDeal.
• CoinDeal’s perpetrators raised over $45 million by selling unregistered securities to investors and promised high returns.
• CoinDeal founder Neil Chandran misused funds for personal expenses, including the purchase of cars, property, and a boat.

The U.S. Securities and Exchange Commission (SEC) has filed charges against eight individuals involved in a fraudulent crypto investment scheme called CoinDeal. According to the SEC’s complaint, CoinDeal’s perpetrators raised over $45 million by selling unregistered securities to investors. They promised high returns and stated that CoinDeal’s blockchain technology would eventually be sold to wealthier buyers for trillions of dollars.

However, CoinDeal never sold the blockchain technology and no wealth was ever distributed to investors. Daniel Gregus, the SEC’s regional director for Chicago, said: „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 SEC also found that CoinDeal founder Neil Chandran misused funds for personal expenses, including the purchase of cars, property, and a boat. A past announcement suggests that Chandran had to forfeit at least 100 different assets. Chandran has a long history of fraud, and he was indicted by the U.S. Department of Justice on other charges related to CoinDeal last summer. In 2017, he was arrested in the U.S. on felony charges related to a firm called Sungame Corp. In 2015, he was arrested in the UK on fraud charges related to a company called Hypercane.

The SEC is seeking disgorgement of profits, interest, penalties, and an injunction against the eight individuals. It is also seeking an order to freeze the defendants’ assets and impose a permanent bar on Chandran from serving as an officer or director of any public company.

Investors should always be wary of high-yield investments and should thoroughly research the background of any company before making an investment. The SEC is committed to protecting investors from fraud and will continue to bring enforcement actions against those who perpetrate such schemes.