Numerous investors purchased enrollment packages through Ormeus Global and purchased Ormeus Coin through digital currency exchanges, US authorities said. Photo: Ormeus Coin.
US authorities have filed criminal charges against an Asia-based cryptocurrency executive, and civil charges against him and his sister, accusing them of defrauding retail investors out of millions of dollars with a digital token.
In papers filed in Manhattan federal court, the US said John Barksdale, a former resident of Thailand, lied about the value and profitability of Ormeus Coin‘s mining assets, including that the coin was backed by a $250 million mining operation.
He allegedly falsely said the operation generated more than $5 million of monthly revenue.
Barksdale and his sister JonAtina Barksdale, of Hong Kong, were separately charged by the Securities and Exchange Commission with conducting fraudulent unregistered offerings of Ormeus Coin.
The SEC said the Barksdales raised $124 million since 2017 from more than 20,000 investors through their multi-level marketing company Ormeus Global, and spent millions of dollars on travel, real estate and other personal expenses.
Authorities said the siblings promoted Ormeus Coin through roadshows and social media, as well as a Times Square jumbotron in Manhattan proclaiming: “$250 Million Cryptocurrency Mining Farm Revealed in Legal Audit by Ormeus Coin.”
The Barksdales “acted as modern-day snake-oil salesmen” in misleading investors, Melissa Hodgman, associate director of the SEC enforcement division, said in a statement.
Lawyers for the Barksdales could not immediately be identified.
John Barksdale has been arrested, and faces up to 65 years in prison on securities fraud, wire fraud and conspiracy charges, according to authorities.
Both defendants are US citizens, with John Barksdale, 41, having lived in Thailand, the SEC said. His sister, JonAtina, 45, lives in Hong Kong, according to the indictment.
“John Barksdale perpetrated a scheme to sell the cryptocurrency Ormeus Coin to investors around the world through a web of lies,” US attorney Damian Williams said.
SEC chair Gary Gensler has called the cryptocurrency industry the “Wild West” of finance and wants cryptocurrency exchanges to register with the SEC.
The White House has been considering broad oversight over the cryptocurrency market, in part to address ransomware and other cyber crime.
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