The U.S. Securities and Exchange Commission (SEC) on Thursday sued two crypto advisory firms and their owner for allegedly misappropriating investors’ funds that they had pledged to invest in digital assets.
The charges, filed in the federal district court in Manhattan, allege that Creative Advancement LLC and Edelman Blockchain Advisors LLC, and their owner, Gabriel Edelman, raised $4.3 million by offering and selling securities to four investors using “false and misleading statements” between February 2017 and May 2021. Those statements included promises to invest in digital assets, when, in reality, Edelman used their funds to bankroll his personal expenses, according to the complaint.
The complaint also alleges that Edelman engaged in “Ponzi-like” activities by sending some investors early repayments to encourage them to make larger investments in the scheme. It described the investors as elderly and “relatively unknowledgeable” about crypto.
The SEC is seeking court orders to...
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