US SEC Sues Owner of Alleged Ponzi-Like Cryptocurrency Scam

The Securities and Exchange Commission has once again launched a lawsuit against two advisory firms and their owner for running a Ponzi-like cryptocurrency scheme.

The companies operated for more than four years and managed to raise almost 4.4 million dollars.

• The suit is against Creative Advancement LLC and Edelman Blockchain Advisors LLC, as well as their owner, Gabriel Edelman.
• The complaints allege that Edelman, through his companies, “fraudulently offered and sold securities, using false and misleading statements” from February 2017 to May 2021.
• The SEC believes he raised $4,390,000 from at least four investors over those four years.
• Edelman promised that these funds would be invested in cryptocurrencies, which would have been bought with discounted pledges.
• However, the Commission alleged that he invested “only a small portion of investors’ funds in digital assets” and used the majority to fund his “own personal benefit,” including paying credit cards or shipping money to relatives.
• In addition, the SEC claimed that Edelman operated a “Ponzi-like” scheme, repaying early investors with some of the new investors’ funds to “encourage their ever-larger investments.”
• The agency’s lawsuit alleges that Edelman committed securities fraud and asked the court to permanently bar him “from engaging in the acts, practices and business courses requested herein.”
• The SEC’s lawsuit, which claims Edelman currently resides in Spain, explained how one of the Ponzi-like schemes worked:

For example, an investor initially invested $50,000. Edelman returned $75,000 within a few months, and the investor subsequently invested an additional $600,000. Edelman returned $720,000 a few months later. After that, the investor invested $1,000,000, based on the alleged past performance and Edelman’s promise that the investor would receive a 15% return. Thereafter, Edelman did not return any funds to this investor.