Bitcoin Daily: SEC Files Complaint Against Fraudulent Crypto Operator; Australians Lost $14.8M To Crypto Crime From Jan. To July

The Securities and Exchange Commission (SEC) has announced fraud charges against a Brooklyn individual and two of his entities who allegedly engaged in a fraudulent scheme to sell digital securities to investors and to manipulate the market for those securities.

The agency is looking to freeze at least $8 million of the $14.8 million the defendants raised in 2017 and 2018.

Reginald “Reggie” Middleton and two entities he controls, Veritaseum, Inc. and Veritaseum, LLC (collectively Veritaseum) are accused of marketing and selling securities called “VERI” tokens, while misleading investors via multiple material misrepresentations and omissions.

The defendants allegedly “misled investors about their prior business venture and the use of offering proceeds, touted oversized — but fictitious — investor demand for VERI, and claimed to have a product ready to generate revenue when no such product existed. The complaint further alleges that Middleton manipulated the price of the VERI tokens trading on an unregistered digital asset platform. The complaint also alleges that Middleton recently moved a significant amount of investor assets and then dissipated a portion of those assets, transferring them to Middleton’s personal account” according to an SEC press release.

Middleton and Veritaseum have been accused of violating the registration and antifraud provisions of the U.S. federal securities laws. In addition, Middleton allegedly violated the antifraud provisions due to the trading.

And crypto scammers stole a record $14.76 million from Australians between January and July this year.

The Australian Competition and Consumer Commission (ACCC) revealed that many of the scams use social media platforms, fake celebrity endorsements or online trading platforms attract prospective investors.

“People need to update their idea of what a scam is so that we are less vulnerable. Scammers are professional businesses dedicated to ripping us off. They have call centers with convincing scripts, staff training programs, and corporate performance indicators their ‘employees’ need to meet,” said ACCC Deputy Chair Delia Rickard in a press release.


New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.