SEC Charges Siblings in $124M ‘Snake Oil’ Crypto Scam

The Securities and Exchange Commission said a brother-and-sister duo defrauded thousands of investors out of more than $124 million via two unregistered, fraudulent offerings of securities in the digital token Ormeus Coin.

John and JonAtina (Tina) Barksdale are charged with violating federal securities laws, manipulating the price of their coin and using investor money for personal expenses, the SEC said Tuesday (March 8).

“We allege that the Barksdales acted as modern-day snake-oil salesmen, using social media, promotional websites and in-person roadshows to mislead retail investors for their own personal benefit,” Melissa Hodgman, associate director in the SEC’s Division of Enforcement, said in a news release.

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“We will continue to vigorously pursue persons who sell securities in schemes to defraud the investing public, no matter what label the promoters apply to their products,” Hodgman said.

According to the SEC, the Barksdale’s scheme lasted from June 2017 until the present, with the siblings offering and selling Ormeus Coin to investors on crypto trading platforms.

The pair also started a multi-level marketing business called Ormeus Global, where they offered and sold subscription packages that included Ormeus Coin and an investment in a crypto trading program.

The SEC said John Barksdale held roadshows around the world to promote the offerings, while his sister marketed them on YouTube, social media and other platforms, falsely claiming Ormeus Coin was supported by one of the largest crypto mining operations in the world, even though the Barksdales shuttered their mining operations in 2019 after generating under $3 million in total mining revenue.

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Meanwhile, the Barksdales were allegedly telling investors Ormeus Coin had a $250 million crypto mining operation that produced $5.4 million to $8 million in monthly revenue.

To preserve this image, the Barksdale arranged for a public website to display the wallet from an unrelated party “showing more than $190 million in assets as of November 2021, even though the Ormeus wallets were worth less than $500,000,” the SEC said.