The US market regulator has accused a man from Ohio of misleading 150 crypto investors.
On 11 February, The US Securities and Exchange Commission (SEC) has filed a lawsuit in New York federal court against Michael Ackerman who collected nearly $33 million through misleading 150 cryptocurrency investors.
Two unnamed persons participated with Ackerman in the scam. They established the Q3 Trading Club in June 2017, and then investment alliance Q3 I LP in the summer of 2018.
As of July 2017, Ackerman and his partners allegedly started to attract investors to the Q3 Trading Club through Facebook, targeting physicians particularly.
In addition, the partners claimed that Ackerman’s algorithmic trading strategy could bring strong profits.
Accordingly, the market regulator claimed the fraudsters made screenshots of Q3 trading account to give false impression that it holds as much as $310 million in assets. However, it contained no more than $6 million.
Moreover, SEC accuses Ackerman of misleading investors about the success of the cryptocurrency trading through convincing them of the safety of investor funds in Q3 trading account. In addition, he promised investors of 50% of the account’s profits.
The fraudsters allegedly transferred portion of investor funds to cryptocurrency, and were then deposited on a digital asset exchange located in the British Virgin Islands.
Accordingly, they reportedly received huge fees without informing investors.
SEC warns investors against ICOs
In January, the market regulator has charged some people of having earned more than $30 million through illicit initial coin offerings (ICOs).
Therefore, the SEC urged investors against the ICOs.
Cryptolydian earlier reported that the European Securities and Markets Authority (ESMA) has collaborated with the Securities and Exchange Commission (SEC) to outline regulations governing the crypto industry.
The move indicates that the regulators have put the crypto among their priorities. They seek to educate market participants about the potential risks that would face them.