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The Securities and Exchange Commission (SEC) has accused John and JonAtina (Tina) Barksdale over an alleged crypto scam. Two unregistered securities offerings involving a digital token named “Ormeus Coin” led to more than $124 million in losses for thousands of retail investors.
According to the SEC’s lawsuit, from June 2017 until the present, the Barksdales marketed and sold Ormeus Coin to investors on crypto trading platforms.
In addition, from June 2017 to April 2018, through a multi-level marketing enterprise named Ormeus Global, the Barksdales advertised and sold subscription packages that included Ormeus Coin and an investment in a crypto trading program.
Siblings held roadshows to advertise their scam
As stated, to market the offerings, John Barksdale organized roadshows across the world. At the same time, he and his sister, Tina, directed the development of social media postings, YouTube videos, news releases, and other promotional materials.
According to the lawsuit, the Barksdales arranged for a public website to display a wallet of an unaffiliated third party to maintain the deception that Ormeus Coin was successfully mining crypto.
As of November 2021, the wallet had more than $190 million in assets. Despite the fact that the Ormeus wallets were valued at less than $500,000. According to the lawsuit, the Barksdales are also accused of manipulating Ormeus Coin’s price and misusing millions of dollars in investor monies for personal needs.
Melissa Hodgman, Associate Director in the SEC’s Division of Enforcement said, “We allege that the Barksdales acted as modern-day snake-oil salesmen, using social media, promotional websites, and in-person roadshows to mislead retail investors for their own personal benefit.”
“We will continue to vigorously pursue persons who sell securities in schemes to defraud the investing public no matter what label the promoters apply to their products.”
The lawsuit accuses the Barksdales of breaking federal securities laws and seeks injunctive relief, disgorgement plus interest, and civil penalties in the United States District Court for the Southern District of New York.
Investors should be aware of possible crypto investment scams and investing based on social media, according to the SEC’s Office of Investor Education and Advocacy. The growing popularity of cryptocurrencies acts as a breeding ground for scammers and fake projects to nourish.