SEC Alleges Cryptocurrency Mining and Buying and selling Operation Scammed $12 Million from Buyers

The Securities and Alternate Fee (SEC) has obtained an asset freeze and different emergency aid in opposition to Daniel F. Putnam, of Utah, Jean Paul Ramirez Rico, of Colombia, and Angel A. Rodriguez, of Utah, who allegedly scammed over $12 million from over 2000 buyers in a cryptocurrency-related fraud.

In keeping with the SEC, starting in no less than July 2017, Putnam operated a advertising and marketing enterprise often known as “Fashionable Cash Crew.” He allegedly offered pursuits in a purported cryptocurrency mining operation to just about 200 buyers.

The SEC alleges that Putnam misappropriated a few of these investor funds and spent them on a condominium and different private bills.

The SEC’s criticism additionally alleges that Putnam, Ramirez, and Rodriguez, then raised further funds by providing “cryptocurrency buying and selling packages” to buyers that claimed to offer the potential for top returns.

The SEC claims that in actuality the defendants misappropriated investor funds for private use and made Ponzi-like distributions to earlier buyers. The SEC claims the fraud was operated by means of two Utah firms managed by Putnam, MMT Distributions, LLC (d/b/a Fashionable Cash Crew, Eyeline Buying and selling, and WealthBoss), and R & D World, LLC (d/b/a Fashionable Cash Crew, Bitzolkin, Bzlogin).

One impacted investor apparently recruited a number of family and friends members to buy buying and selling packages, who collectively invested 993.29 Bitcoins.

In a single instance within the criticism, two buyers deposited funds totaling $112,500 into the MMT Distribution, LLC checking account. Financial institution information don’t mirror that these funds had been exchanged for digital property. As a substitute, on August 15, 2018, Putnam wired $105,273 from the account to buy a condominium.

In January 2020, Putnam allegedly advised Fashionable Cash Crew buyers that the Fashionable Cash Crew Bitfinex account held roughly 260 bitcoins. The SEC claims that, in actuality, Bitfinex information present only one buying and selling account, which by no means held greater than 50 bitcoin at any given time, and that was closed in or round Might 2019.

.A yr in the past, Engadget did an fascinating expose on Putnam and a number of other of his affiliated entities.

Enforcement Friday

The SEC’s criticism was filed below seal on Might 7, 2020. The SEC prices Putnam, Ramirez, Rodriguez, MMT Distribution, and R & D World with violating the antifraud provisions of Part 17(a) of the Securities Act of 1933 and Part 10(b) of the Securities Alternate Act of 1934 and Rule 10b-5 thereunder.

The criticism additional prices Putnam, Ramirez, and MMT Distribution with violating the registration provisions of Sections 5(a) and 5(c) of the Securities Act, and names Putnam’s father, Richard T. Putnam, as a aid defendant. Along with the asset freeze and different emergency aid obtained, the SEC seeks everlasting injunctions, disgorgement of ill-gotten positive factors with prejudgment curiosity, and civil penalties.