SEC Halts Alleged ‘Diamond-Backed’ ICO Ponzi Scheme

 

 

 

 

The U.S. Securities and Exchange Commission announced yesterday that it has halted a $30 million cryptocurrency Ponzi scheme that targeted hundreds of U.S. and Canadian investors. In a press release, the SEC confirmed that it has obtained a court order in response to a complaint leveled against Argyle Coin, LLC and the company’s principal, Jose Angel Aman.

On May 20, the Honorable Judge Robin L. Rosenberg of the U.S. District Court for the Southern District of Florida granted the SEC’s request for a temporary restraining order and temporary asset freeze against Aman, Argyle Coin and other companies charged by the SEC as relief defendants. The court also appointed Jeffrey D. Schneider as a Receiver over Argyle Coin.

According to the complaint, Argyle Coin used funds from new investors to pay promised returns to previous investors. The scheme was described by the SEC as “a continuation of a scheme Aman orchestrated with two other companies he owns, Natural Diamonds Investment Co. (Natural Diamonds) and Eagle Financial Diamond Group Inc (Eagle).”

The SEC alleges that Aman used those two companies to engage in “unregistered offerings of securities” beginning in 2014, promising investors that Natural Diamonds and Eagle Financial would invest client funds in “whole diamonds” that would then be cut and sold for “huge profits.” In 2017, Aman began enticing potential investors to fund Argyle Coin.

Investors were told that there was no risk in the investment, and that the coins were backed by “fancy colored diamonds.” In addition, Aman promised investors that their funds would be used to develop his company’s cryptocurrency project. That apparently never happened:

Instead, according to the complaint, Aman, Natural Diamonds, Eagle, and Argyle Coin, misused or misappropriated more than $10 million of investor funds to pay other investors their purported returns and for Aman's personal expenses, including rent on his home, purchases of horses, and riding lessons for his son.

The complaint formally charges Aman, his companies, and two other scheme participants with security registration violations, Aman and his companies are also charged with violating securities law antifraud provisions. The SEC is seeking financial penalties and repayment of the defendants’ ill-gotten gains.

Author: Ken Chase

Freelance writer whose interests include topics ranging from technology and finance to politics, fitness, and all things canine. Aspiring polymath, semi-professional skeptic, and passionate advocate for the judicious use of the Oxford comma.

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