Despite the best efforts of many out there, cryptocurrency investment scams still exist and are running rampant in today’s world. It almost seems like you’ve got one popping up every week.
An Age-Old Fraud Scheme
According to a recent filing with a federal court in Florida, Q3 Investment Recovery Vehicle, a company that represents over 100 investors, has sued a third party company for cheating them out of a deal.
As the complaint explains, Q3 I LP was a company that sold itself based on the expertise of its founders. These founders include Michael Ackerman, a former institutional broker at the New York Stock Exchange; James Seijas, a financial advisor that worked for Wells Fargo until March 2019; and Quan Tran, a surgeon.
The company had reportedly gotten money from these investors, claiming that they would use the cash to make cryptocurrency trades based on a high-performing trading algorithm that Ackerman had developed. The former trader explained to potential investors that he had used the algorithm to make stock trades in the past and had made a killing. However, he could also tweak it to make a solid crypto investment tool.
The complaint added that while they collected over $33 million from investors. The company had also charged its customer’s additional licensing fees to get a look at Ackerman’s trading algorithm. This resulted in another $4 million in revenues. All through that time, however, the traders only made between $5 million and $10 million in cryptocurrency trades, and they diverted at least another $20 million to finance their extravagant lifestyles.
A complaint filed with the Securities and Exchange Commission (SEC) back in February showed that Ackerman had bought five properties between 2018 and 2019, including a $3 million beach house in Florida and a 150+-acre plot in Montana. He also bought jewelry and cars as well.
The defendants also allegedly used some money between August 2017 and December 2019 to finance their company. Some of the cash went to marketing campaigns, as they required more investors to keep splurging cash on their Ponzi scheme.
Scams Are Seemingly Everywhere
Along with the three, Donna Seijas (James Seijas’ wife), and Steve Saunders, the Vice President of Operations at Skyway Capital Markets LLC, were also named in the complaint.
Scammers have been especially active in this period, as they’re taking advantage of the global panic surrounding the coronavirus pandemic to Swindle people. Late last month, the United States Commodity Futures Trading Commission (CFTC) sent out a warning to the public about impersonation scams that are on the prowl.
As the regulatory agency explained, fraudsters have found ways to use major events to stoke panic and add credibility to their claims. It confirmed that it had received hundreds of complaints about crypto or ForEx scams that promise to give high returns in short time spans.
The warning ended with a commitment to pursue these people and prosecute them to the full extent of the law, as well as an admonishment for people to be extra vigilant.