The US Securities Exchange Commission has charged two companies over a Ponzi scheme that allegedly defrauded approximately 1,200 investors of more than $27 million by promising to trade their money on crypto exchanges. According to the SEC, the illegitimate companies involved in the fraudulent activities are 1st Million LLC and The Smart Partners LLC, which were fake companies set up to run a crypto Ponzi scheme. Crypto scams have surged all over the world amid the ongoing pandemic.
The company targetted African immigrants.
According to the SEC complaint, the company owners who were of African heritage falsely told investors, many of whom were also African immigrants, that their funds would be used for crypto trading and other foreign exchanges. SEC further revealed that the companies often cited community trust and targeted African immigrants by promising them risk-free returns of between 6% and 42% by trading investor funds on crypto exchanges. The SEC alleged that 1st Million and Smart Partners owner Dennis Jali, who claimed to be an expert trader, falsely presented himself as a self-made millionaire, rented office space to conduct in-person meetings, and gave the appearance of a legitimate company.
SEC charges Ponzi scheme targeting African immigrants https://t.co/lyrs3RSViJ
— SEC_News (@SEC_News) August 28, 2020
Crypto scams continue to rise amid the global pandemic.
Cryptocurrency scams have significantly surged around the world amid the ongoing global pandemic. Earlier this year, the US Federal Bureau of Investigation issued a warning saying scammers might be looking to unleash a surge in crypto-related scams. Several countries also reported a surge in crypto scams that included a spike in ransomware attacks, Ponzi schemes, and other different types of scams involving cryptocurrencies.
Several types of scams involving crypto have become frequent, including fake giveaways, sextortion, fake exchanges, fake ICO’s, bitcoin recovery, video scams, Ponzi schemes, and the list goes on. Earlier, accounts of several famous people on Twitter were hacked to solicit bitcoins from their followers.