US SEC accuses man of defrauding crypto investors in two digital asset securities offerings – regulation

The US Securities and Exchange Commission (SEC) has charged a citizen of Latvia with defrauding investors in two crypto offerings. The fraudster “used fake names, fictitious companies and fraudulent profiles to carry out his schemes and embezzled nearly all of the investor funds collected.”

Two fraudulent cryptosystems

The SEC announced Thursday that it has “accused a Latvian citizen of defrauding hundreds of retail investors of at least $7 million through two separate fraudulent digital asset securities offerings.”

The securities watchdog found that Ivars Auzin defrauded U.S. and foreign investors:

Auzins allegedly used fake names, fictitious companies and fraudulent profiles to carry out his schemes and misappropriated nearly all of the investor funds raised.

Its first scheme ran from January to March 2018. “Auzins fraudulently offered and sold unregistered digital tokens as part of an ICO [initial coin offering] of Denaro, a purported multi-currency debit card platform,” the SEC stated.

The complaint alleges that “any products or services claimed to be offered were fictitious, including the relationship with the credit card issuer,” and notes that “Auzins misappropriated all of the proceeds from the ICO.”

His second scheme ran from April to July 2019. "Auzins fraudulently offered the unregistered securities of Innovamine, which purported to offer a cloud mining program," the SEC described, adding that he "misappropriated nearly all of the funds raised in the offering."

The securities regulator detailed:

As we allege, Auzins engaged in a brazen scheme to defraud retail investors under the guise of profitable digital asset opportunities.

The Latvian citizen is accused of “violating the anti-fraud and registration provisions of the federal securities laws.” The SEC “seeks permanent injunctive relief, including conduct-based injunctions, disgorgement plus prejudgment interest, civil penalties, and a bar and director’s bar against him.”

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