US SEC Charges Man with Conducting $4M Cryptocurrency Mining Scam

Jan 11, 2020 at 11:27 // News
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SEC charges man with $4M cryptocurrency mining scam

A suspect identified as Donald G. Blakstad from the United States of America is facing legal action by the agency responsible for implementing federal laws, Securities and Exchange Commission (SEC), for supposedly operating a fake cryptocurrency mining activity.

According to an official complaint dated Wednesday January 8, 2020, Donald managed to steal over $3.5 million from numerous venture capitalists using 3 different firms.

The dealings included a big automobile parts holding company, an oil and gas company, plus “Energy Sources International” (ESI), an alleged digital asset mining undertaking where the suspect was the only active worker.

According to the complaint, the event includes an offering deception arranged by Donald in which he managed to collect more than $3.54 Mln from around 14 cryptocurrency venture capitalists via the deceitful offer and sale of securities in 3 firms the suspect possessed and managed.

Rather than investing as assured, Donald illegally took the majority of stockholders incomes for his individual gains, including disbursements of funds on private entertainment, the buying of a stake in a certain topnotch nightclub, buying the most expensive vehicles, and facilitating malevolent securities trading.

Cryptocurrency Mining Scams

Via his alleged digital asset mining firm, Donald purportedly swindled $550k from 5 investors. The man in question told the investors that their funds would be applied to settle equipment outlays.

Nevertheless, the U.S. SEC revealed that Blakstad used up about half of the capital at funny things including restaurants, hotels, vehicles and casinos. In the summer of last year, Donald was also accused in a separate approx. $6.25 Mln insider trading scheme.

Such scam cases related to digital asset mining operation have been happening in this industry, and massive stockholders and investors have made a lot of losses.

Another phony digital asset mining business known as Bitqyck, successfully sold more than $13 Mln worth of cryptocurrencies to about 13k venture capitalists.

The firm was to generate digital asset using cheap electricity rates. However, the U.S. SEC later discovered that this deal never existed. Founders of the company was advised to compensate $13 million to investors and were also fined with around $10 million. 

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