Fake Cryptocurrency Mining Company Scammed Investors With $3.5 Million

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Security and Exchange Commission (SEC) of the United States has sued a man for allegedly operating a fraud cryptocurrency mining company. As per the complaint Donald G. Blakstad cheated over $3.5 million from investors via three different companies.

Fake Cryptocurrency Mining Company Scammed Investors With $3.5 Million

 

"This matter involves an offering fraud orchestrated by Blakstad in which he raised approximately $3.544 million from at least 14 investors through the fraudulent offer and sale of securities in three companies he owned and controlled," the complaint reads.

According to the report, these three businesses include a vehicle spare parts company, a gas and oil firm, and a company named Energy Source International. However, the main business for Blakstad was fake cryptocurrency mining.

Reports also suggest that Blakstad has stolen $550,000 from five individuals via his fake cryptocurrency mining company. He told them that this money is going to be utilized for buying equipment which is necessary for mining.

SEC claims that Blakstad has invested half of the money at casinos, hotels, and restaurants. He is also charged for another case of $6.2 million for inside trading scheme back in summer 2019.

However, this is not the first time the cases of fake cryptocurrency mining operations have surfaced. Earlier, Bitqyck another fake cryptocurrency mining company was reported selling $13 million worth of token to over 13,000 investors.

The company was said to generate cryptocurrency using electricity which they have secured at very low rates. However, the SEC investigated the case and found that there is no such agreement existed.

"Bitqyck, aided and abetted by its founders, also is alleged to have illegally operated TradeBQ, an unregistered national security exchange offering trading in a single security, Bitqy," said the SEC.

It was disclosed that the entire mining company was fake and later the founders of the company agreed to return $13 million with interest to the investors along with $10 million civil penalties.

 
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