SEC charges CoinDeal suspects with defrauding investors of $45 million

The US Securities and Exchange Commission (SEC) has announced charges against Neil Chandran and seven other individuals and entities for their alleged role in a fraudulent cryptocurrency investment scheme known as CoinDeal. According to the SEC, the defendants defrauded investors of around $45 million and used the money to buy luxury goods such as real estate, cars, and a boat.

The defendants, which include Chandran, Michael Glaspie, Garry Davidson, Linda Knott, Amy Mossel, AEO Publishing, Banner Co-Op, and BannersGo, are accused of promising to sell the CoinDeal blockchain project to a group of high-profile buyers, which they claimed would result in significant returns for investors. However, the SEC alleges that the defendants deceived investors about CoinDeal's valuation and the companies involved in the potential acquisition deal. The scheme is said to have run from January 2019 to 2022, but the CoinDeal sale never happened and investors did not receive any distributions for their involvement in the project.

In addition to seeking penalties and permanent injunctions against all defendants, the SEC has requested that Chandran be subject to a conduct-based injunction. This is not the first time Chandran has faced legal action in connection with CoinDeal. He was previously arrested by the US Department of Justice for offenses related to wire fraud and engaging in illicit money transactions as part of the cryptocurrency investment scheme.

The SEC's charges against Chandran and the other defendants come on the heels of another cryptocurrency-related investigation launched by the agency. In September 2022, the SEC announced an investigation into two advisory companies and their owner, Gabriel Edelman, for operating a Ponzi-like cryptocurrency scheme. The organizations, which were active from February 2017 to May 2021, reportedly raised nearly $4.4 million from investors. Edelman is accused of promising to invest the funds in discounted cryptocurrencies, but only investing a small portion of the capital in digital assets and using the rest to buy personal items and send money to family members.

The SEC's actions against Chandran and Edelman highlight the ongoing problem of fraudulent cryptocurrency investment schemes, which have defrauded investors of millions of dollars. The agency has made it clear that it will take action against individuals and entities that engage in such activities, and is committed to protecting investors and maintaining the integrity of the financial markets. As always, it is important for investors to thoroughly research any potential investment opportunities and to be wary of unrealistic promises of high returns with minimal risk.