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Siblings Accused of Defrauding Using Mining Coin

For their alleged roles in the Ormeus Coin ICO, the brother and sister team will face charges of wire fraud, securities fraud, and conspiracy.

Siblings Accused of Defrauding $124M by Mining Coin iBase Trading.
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For their alleged roles in the Ormeus Coin ICO, the brother and sister team will face charges of wire fraud, securities fraud, and conspiracy.

The US government has filed criminal charges against two siblings for allegedly defrauding investors through the Ormeus Coin scheme.

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SEC & DOJ Accusations

On March 8, the Securities and Exchange Commission (SEC) charged brothers John Albert Loar Barksdale and JonAtina (Tina) Barksdale with violating federal securities laws and defrauding at least 12,000 “retail investors” of more than $124 million. John had charges of wire fraud, securities fraud, and conspiracy by the Department of Justice (DOJ) while in a foreign country.

Both of the Barksdale siblings are U.S. citizens. John, 41, was living in Thailand while JonAtina, 45, was in Honk Kong according to Reuters.

Two ICOs for Ormeus Coin took place in 2017. According to the SEC complaint, the Barksdales lied about Ormeus Coin’s cryptocurrency mining assets’ “size, value, and purported profitability.”

It is an ERC-20 and BEP-20 token for the Ethereum (ETH) and BNB (BNB) blockchains (BNB).

Despite the fact that both siblings contributed to the project’s social media posts and videos, only John attended roadshows and conferences to promote it. John has been compared to a “snake-oil salesman” by Melissa Hodgman, an associate director in the SEC’s Division of Enforcement.” She also claimed that both siblings deceived retail investors for personal gain using “social media, promotional websites, and in-person roadshows.”

The Charges Against the Barksdale

Barksdale received accusations of defrauding investors by making false assertions regarding the Ormeus mine’s status by the SEC and DOJ. Mining for the Oremus Coin began in November 2017 with physical Bitcoin (BTC), Litecoin (LTC), and Dash (DASH) mining devices. This is according to the Oremus Coin website. The Barksdales claimed that the project had put $250 million into the mining operation that supported ORME. Also, it brought in $5 million per month.

The project received accusations of deceiving investors by claiming that its vault wallet was worth more than $190 million in November of last year. The display, however, was allegedly using a separate website that displayed the value of a different wallet. The project’s real wallets “were worth less than $500,000,” according to the SEC.

According to the DOJ, the mining operation’s value “never approached $250 million.”

Also, it “never produced revenues exceeding one million dollars in any month.”

John is still on the list as an advisor on the Ormeus Coin and Ormeus Cash websites. He was writing a blog post on February 26, 2018, titled “Why Taking Calculated Risks In Life Is Important.”

While the Barksdales are still in custody, a court date will be set.

The SEC May Have More Leverage

Thanks to a recent decision by the 11th Circuit Court of Appeals. It further allows prosecutors to use a broader range of evidence. On Feb. 18, the court overturned a decision by a lower court that barred prosecutors from using videos in the securities fraud case against the BitConnect founders.

The Securities and Exchange Commission (SEC) has been wary of common cryptocurrency advertising methods and whether they constitute securities fraud. The Commission is reportedly targeting nonfungible tokens (NFT) used for fundraising purposes like traditional securities. This is according to reports published on March 3.

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Angela Lopez stepped into the Cryptocurrency world after her Journalism career and hasn't looked back since, writing about anything crypto-related. She started working with iBasetrading in October 2011.