The U.S. Securities and Exchange Commission has found two Maryland-based companies guilty of a Ponzi program that allegedly defrauded investors $ 27 million.
In the midst of an ongoing pandemic, crypto fraud has increased around the world. The U.S. Securities Exchange Commission announced that the fraudsters collected more than $ 27 million from nearly 1,200 investors. The Ponzi program is said to be scamming people by promising to exchange their money on cryptocurrency exchanges. According to the SEC, illegitimate companies involved in fraudulent activities are 1st Million LLC and The Smart Partners LLC, fake companies set up to run a crypto pyramid scheme.
Scammers Target African Immigrants.
According to SEC reports, African-based company owners promised investors, many of them African immigrants, that their funds will be used for crypto trading and other foreign exchange transactions. The SEC also reported that companies frequently refer to public trust and target African immigrants, promising 6% to 42% risk-free returns to investors when buying and selling investor funds on crypto exchanges. The SEC claimed that Dennis Jali, owner of 1st Million LLC and The Smart Partners LLC, who claimed to be an expert trader, falsely presented himself as a millionaire, rented office space to hold face-to-face meetings, and pretended to be a legitimate company.
Crypto Fraud Continues To Increase In The Midst Of The Global Pandemic.
Cryptocurrency scams have increased significantly around the world amid the ongoing global epidemic. Earlier this year, the US Federal Bureau of Investigation issued a warning stating that fraudsters may want to trigger an increase in cryptocurrency fraud. Many countries reported an increase in ransomware attacks, pyramids, and various other cryptocurrency scams.
Various types of scams involving crypto such as fake giveaways, sextortion, fake exchanges, fake ICOs, Bitcoin recovery, video fraud, pyramid schemes have become frequent and the list continues. Also, before, several famous people’s accounts on Twitter were hacked to request Bitcoin from their followers.