Ico scam jail time

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ico scam jail time

Co-founder of Centra Tech, Robert Farkas, was recently sentenced to one year in jail after he pleaded guilty to operating a fraudulent ICO scheme that raised $25 million from investors.

Farkas accused and jailed

According to a statement from the US Department of Justice, the co-founder was accused of conspiring to commit securities and wire fraud. The prosecutors initially opted for a $250,000 fine and a sentence of between 5 to 7 years. The co-defendants in the case- Raymond Trapani and Sohrab Sharma, originally founded Centra Tech in 2017 with Farkas.

The three rode the ICO wave and collected over $25 million from investors, promising to develop a debit card that allows users to make crypto purchases at any business accepting Mastercard or Visa.

Ico scam jail time


The authority highlighted that Titanium ICO neither have any authorization from the Securities and Exchange Commission (SEC) nor had any exemption to offer such investments, thus violating the country’s securities law.

Stollery further admitted that he falsified the aspects of Titanium ICO’s whitepaper. He even added fake client testimonials on Titanium’s website.
The project even claimed that it had inked deals with big names like PayPal, Boeing, and Walt Disney.

But that was not all. Stollery even falsely claimed that he had a business relationship with the Federal Reserve.

His guilty plea also includes admission to the misappropriation of customer funds.
He spent a portion of the ICO proceeds for credit card payments and even paying bills for his Hawaii condominium.

The ICO Bust

The ICO market peaked in 2017 but now has almost vanished.

Ico scammer jail time

FDIC insured and had no partnership with Visa.

The Feds subsequently charged Rice in 2018 over his ICO scam. He pleaded guilty the following year.

It was later revealed Rice used investor funds to support an increasingly luxurious lifestyle.

The SEC noted he’d spent millions on legal fees, food, hotels, and transportation.

Convicted felon pulls ICO scam, what could go wrong?

Rice was no stranger to legal troubles when he launched AriseCoin.

In 2015, authorities charged Rice with public record tampering after he forged signatures and seals of the Secretary of State on incorporation documents.

At the same time, Rice faced charges of stealing investor funds.

[Read more: Crypto thief gets 8 years for stealing $13M in DASH from friend]

Still, Rice can count himself somewhat lucky.

The US Department of Justice announced on Monday that Michael Alan Stollery, the CEO and Founder of the $21 million initial coin offering (ICO) scam of Titanium Blockchain Infrastructure Services pled guilty to his crime.

He pled guilty to one count of securities fraud and is now facing jail time of up to 20 years. His sentencing has been scheduled for November 18 at a federal district court.

The Titanium ICO defrauded investors in both the United States and overseas until the SEC stopped the offering with a court order in May 2018.

The 54-year-old admitted that he touted the cryptocurrency project to be an investment opportunity to lure investors through false and misleading statements.

Ico scam jail time-

Sharma pled guilty to securities fraud among other charges and was sentenced to eight years in prison; Mayweather and Khaled agreed to not promote securities for three and two years, respectively.

AltCoins

These days, one of the most common types of crypto scam is the “pump-and-dump” scheme, which has existed for decades: Jordan Belfort, the “Wolf of Wall Street,” used it to manipulate penny stocks in the ‘90s. They’ve become increasingly prevalent in crypto due to the lack of regulation in the space, and in the ease of creating new crypto tokens and raising money through social media.

In crypto “pump-and-dumps,” influencers buy a new token, also known as an altcoin, on the cheap; sometimes, they’re gifted shares outright by the coin’s creators.
Influencers then use social media to promote the coin so that their fans buy in, driving up the price.

Ico scam jail time-lapse

FaZe Clan supporters who had invested in the project complained of losing their money on Twitter. As of today, Save the Kids is virtually worthless. While Save the Kids claimed to have donated over $80,000 to Binance Charity in June 2021, a representative for Binance Charity confirmed to TIME that since they do not accept altcoin campaigns (i.e.
newly created tokens outside of the most prominent ones, like Ether and Bitcoin), the supposed donation never went to charitable causes. (FaZe Clan removed one member and suspended three others involved with the coin; they denied acting with malicious intent.)

Save the Kids is just one example of a crypto project in which influencers wielded their sway over fans to extract thousands of dollars, only for the project to collapse upon launch.

Ico scam jail time-out

One of the founders of a cryptocurrency scam that defrauded over $25 million from investors has been sentenced to eight years in prison. Sohrab Sharma, the co-founder of Centra Tech, reportedly relied on fake partnerships and endorsements from celebrities like boxing champion Floyd Mayweather to lure investors.

In its ruling, the Southern District of New York further imposed three years of supervised release on the 29-year-old Florida native.

He will also have to forfeit $36,088,960 and pay a $20,000 fine.

As CoinGeek previously reported, Sharma pleaded guilty to charges of conspiracy to commit securities fraud, mail fraud and wire fraud in July 2020. His trial was set to start in November 2020, but he ended up pleading guilty, avoiding it altogether.

Commenting on the sentencing, U.S.

A version of this article was published in TIME’s newsletter Into the Metaverse.Subscribe for a weekly guide to the future of the Internet.You can find past issues of the newsletter here.

Last year, a group of influencers started promoting an initiative that seemed altruistic and honorable on its surface. The initiative was a crypto token called Save the Kids, which influencers purported would help children in need while making its investors money. Several of the influencers were connected to FaZe Clan, a community of esports gamers with millions of followers—many of them teenagers. The idea made a lot of sense: to leverage the massive popularity of influencers and the power of cryptonomics to raise money for the less fortunate.

It didn’t work out that way.
The token’s value plummeted within days of launch, with large holders immediately dumping their shares.

Scammers have taken advantage of gray areas, crazed enthusiasm around crypto, and the lack of industry regulation in order to trick gullible followers into investing their money. All in all, scammers around the world took home a record $14 billion in cryptocurrency in 2021.

And as the space has evolved, so have scammers’ tactics, in order to stay ahead of an increasingly discerning public.

To chart this history, TIME spoke to three YouTubers who devote their time to tracking down and exposing these scams: Stephen Findeisen (known on YouTube as CoffeeZilla), Spencer Cornelia, and Mike Winnet. These YouTubers exist somewhere between hard-nosed journalist and pundit: they use tips, inside sources and public records to show how scammers are taking advantage of a “Wild West” in crypto.

“It’s like scams on steroids right now,” Findeisen says.

They then quickly unload their shares, which often creates a panic and sends the price spiraling downward.

“You will see 1,000x or 10,000x price surges,” says Cornelia. “And that allows the developers and creators to sell off their ownership stake to all the people now caught up in the hype, and it allows them to make exorbitant amounts of money in a very short amount of time.”

In the case of Save the Kids, the YouTuber Findeisen followed blockchain records to expose the predatory actions of several key FaZe members, revealing how the project’s underlying code was changed at the last minute to allow large shareholders to sell off their holdings immediately. There are no lawsuits related to this scam as of yet.

NFTs

Pump-and-dump schemes have been drawing increased scrutiny from regulators, partially because they’re so familiar.

The authority highlighted that Titanium ICO neither had any authorization from the Securities and Exchange Commission (SEC) nor had any exemption to offer such investments, thus violating the country’s securities law.

Stollery further admitted that he falsified the aspects of Titanium ICO’s whitepaper. He even added fake client testimonials on Titanium’s website.

The project even claimed that it had inked deals with big names like PayPal, Boeing and Walt Disney.

But that was not all. Stollery even falsely claimed that he had a business relationship with the Federal Reserve.

Moreover, his guilty plea includes admission to the misappropriation of customer funds. He spent a portion of the ICO proceeds on credit card payments and even paying bills for his Hawaii condominium.

The ICO Bust

The ICO market peaked in 2017 but now has almost vanished.

With crypto, it’s easier to just launch essentially your own Ponzi scheme.”

In this video, Findeisen, Cornelia and Winnet, walk us through how scammers have constantly tweaked their techniques. Here’s how the influencer scam has evolved in the past five years.

CSGOLotto

In 2016, a new kind of token became the vehicle for a massive deception.

The website CSGOLotto allowed its users to gamble using “skins,” an in-game currency that could be bought, sold and traded, in a very similar manner to how NFTs are deployed now. That year, the FTC charged two social media influencers, Trevor “TmarTn” Martin and Thomas “Syndicate” Cassell, with deceptively endorsing the service while failing to disclose their stake in the company.

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