The U.S. Securities and Exchange Commission (SEC) has charged three Nigerians with organizing a fraudulent Bitcoin investment scheme, as a result of which they stole $2.9 million worth of cryptocurrency from at least 28 U.S. investors.
Documents filed in a New Jersey district court state that Chibuzo Augustine Onyechonam, Stanley Chidubem Asiegbu, and Chukwuebuka Martin Nweke-Eze posed as legitimate investment advisors. Since 2019, they have created about twenty fake websites, passing them off as major brokerage firms. The scammers attracted the attention of potential investors in the U.S. by posting fake reviews from fictitious clients on social media and in investment group chats.
The defendants promised investors returns of up to 25% per month on their investments, directing them to their fake online platforms. To keep investors from withdrawing their funds, they provided fake reports showing growth in investment portfolios. According to the SEC, the scammers used voice-changing software to communicate with investors.
The SEC accuses these individuals of violating the Securities Act of 1933, the Securities Exchange Act of 1934, and the Investment Advisers Act of 1940. The regulator is seeking to impose a permanent ban on their activities, require them to return the illegally obtained funds with interest until a final court decision is reached, and impose an administrative fine on all defendants. The New Jersey District Attorney’s Office has also filed criminal charges against these three Nigerian nationals.
Recently, the SEC also accused Touzi Capital of cryptocurrency fraud amounting to $100 million and misappropriating investor funds. In November, the regulator plans to file a lawsuit against Immutable, the developer of an Ethereum-based gaming platform, for possible violations of securities laws.