SEC Costs Sheng-Wen Cheng for Digital Asset Fraud

The Securities and Change Fee (SEC) has charged Sheng-Wen Cheng with allegations of defrauding buyers within the providing of fairness and digital asset securities, in accordance with a grievance filed by the regulator.

Based on the SEC’s grievance, from roughly August 2017 to June 2018, Cheng obtained investments totaling over $400,000 from a number of buyers for a purported blockchain-based Peer-to-Peer lending market startup that will be developed by a number of firms below his management, Alchemy Finance, Inc., Alchemy Firm, Ltd., and Alchemy Coin Ltd.

The SEC alleges that Cheng falsely acknowledged in providing supplies that he had obtained a $30 million funding from a single investor. Cheng additionally allegedly assured short-term income on the funding in Alchemy, although Alchemy had no precise operations or revenues on the time.

Moreover, the grievance alleges that shortly after acquiring buyers’ cash, Cheng transferred nearly all of proceeds to his private checking account, misappropriating roughly $300,000 of the funds for his private use.

The SEC’s grievance, filed within the U.S. District Courtroom for the Southern District of New York. The SEC states that Cheng has consented to the entry of a judgment that enjoins him from violating the charged provisions and from taking part, immediately or not directly, in any providing of a digital asset safety, with financial reduction to be decided at a later date. The settlement is topic to court docket approval.

In a parallel motion regarding related conduct, the U.S. Legal professional’s Workplace for the Southern District of New York introduced felony costs in opposition to Cheng. Reportedly, Cheng was arrested in August of 2020 with regard to allegations of a $7 Million rip-off to defraud mortgage applications designed to help companies throughout COVID-19.