An SEC suit against allegedly fraudulent ICO was recently put on pause by US federal judge. Prosecutors have interfered because a parallel criminal investigation against the alleged scammers was also on the go.
The Court Put On Hold A $30 Million Crypto Investment Scam
A New Jersey Federal Judge has ordered the pause of SEC’s proceedings against Edith Pardo and Boaz Manor. Recently they were alleged by the Security and Exchange Commission to have raised “over $30 million” through the crypto investment scam CG Blockchain. They were allegedly offering users digital asset securities, called BCT Tokens, from August 2017 to September 2018.
As per the accusation, defendants “raised the funds by engaging in a fraudulent scheme and lying to investors about such material matters as Manor’s identity, criminal background, and multiple material aspects of their enterprise; Pardo’s role in the project; the composition of their business’s management team; and the use of their technology by certain hedge funds.”
One Investigation Might Sabotage The Other
The reason for the SEC case put on pause is that prosecutors think the two suspects and their legal teams might acquire any information revealed from a parallel investigation into their operations. The SEC civil lawsuit on them includes a broad disclosure of information and materials.
A recent report announced that the United States District Judge Stanley Chesler has decided to hit the brakes to the SEC case because this “would best serve the interests of justice.”
The defendants are both charged with one count of securities scam, one count of conspiring to commit wire fraud, and three counts of wire fraud in the case. They are facing possible prison sentences and fees.
In this regard, CryptoPotato recently reported that the US supreme court issued a ruling, placing a cap on the disgorgement sought by the SEC in fraud cases. The court came by way of an 8-to-1 majority, and as part of the decision, the Commission can no longer go for a disgorgement above the net profits of the indicted party.