Two crypto founders were sentenced on Monday to federal prison for defrauding investors of $1.9 million.
according to a release Published by the US Attorney’s Office in California, Jeremy McAlpine and Zachary Peas have been convicted of securities fraud and sentenced to 3 years and 2.5 years in prison, respectively.
during crypto ICO craze In 2017, McAlpine and Matar founded Dropil, a crypto company founded in Belize but operating out of Fountain Valley, California. Droppill created a crypto trading program called an altcoin dropand Dex, an automated trading bot that uses DROP.
According to the release, McAlpine, Matar and Dropil did not register the DROP with the Securities and Exchange Commission (SEC), and “made a series of false statements to investors,” claiming that Dex returns an annualized return of 24-63%. will generate.
Subpoenas, served with McAlpine and Pea, then “produced a fake DEX profitability report, giving a false appearance that DEX was current and profitable,” and created other counterfeit documents, claiming that Drupil, 34, It had raised $54 million from investors when it raised just under $2,000. million from less than 2,500 investors.
Monday’s sentence comes more than a year after McAlpine and Matar pleaded guilty to one count each of securities fraud. SEC charged first McAlpine and Matar with defrauding investors.
The SEC has been busy with crypto-related investigations this summer. The commission on Monday accused 11 people of being involved in it. Fodder, which the SEC called “a fraudulent crypto pyramid and Ponzi scheme”. It has also recently started its investigation. coinbase To check if a cryptocurrency exchange is listing unregistered securities.