Two Firms Charged by US SEC for Crypto Pump and Dump Scheme

SEC Pump and Dump

The US Securities and Exchange Commission has charged executives of two cryptocurrency firms and two individuals with running a pump-and-drop scheme that cost investors around $36.8 million. The scheme involved using a digital token known as Dignity.

The SEC filed a complaint against Cryptobontix Inc., a company based in Canada, and Arbitrade Ltd., a Bermudan firm, and their co-founders, Troy Hogg, James Goldberg, and Stephen Braverman. It also named Max Barber, an international gold trader, as a relief defendant.

The defendants made false claims about the acquisition of $10 billion worth of gold bullion by Arbitrade. They claimed that an accounting firm had verified the purchase.

Through these firms, they were able to lure US citizens into investing in their scheme. They then sold them on the false claims that their digital coins were backed by $1 worth of gold.

According to the SEC, the digital token was created by Russian developers and was only used to commit fraud. The investigation was carried out by Crystal Ivory and David Staubitz in the Miami Regional Office. They were assisted by Fernando Torres and Glenn Gordon.

The agency’s case was handled by Alice Sum and Teresa Verges, who are both supervising attorneys. They are charged with violating the securities laws.