Investment Manager Arrested for $10 Million in Digital Asset Fraud Investigation
A person aged 27 living in New Albany, Ohio was charged by indictment with five counts of wire fraud. The accused allegedly misrepresented themselves as a highly skilled and experienced digital asset trader that specializes in Bitcoin derivatives. Like all investment broker scams the accused offered people guaranteed high returns on investments, the ‘too good to be true’ rule should always be applied here.
Ohio-based companies NBD Eidetic Capital, LLC and SR Private Equity, LLC allegedly deceived over 150 people into investing into the fake scheme and when it came to withdrawing their assets there were misleading reasons to prevent investors from recovering their assets. This fraud was structured like a ponzi scheme with some user getting returns on their investments early on and then being essentially locked out.
This arrest is a massive step forward in providing accountability and trust in a decentralized world. With the five counts of wire fraud each with a maximum sentence of 20 years in prison, if convicted and served consecutively that could mean 100 years or a life sentence. When it comes to such a seemingly harsh sentence you must consider the 100+ victims and how their lives have been destroyed because of the actions of bad actors.
Examples need to be made to show active criminals and those contemplating taking it up as a profession that they can and will be held accountable. There is a movement aimed at eliminating these kinds of illicit actors and organizations and in this case a conviction and maximum penalty imposed would be a huge win for law enforcement and DeFi in general.
The FBI Cincinnati Field Office announced they are investigating the case.
(sources justice.gov , cftc.gov )
Unfortunately, these types of scams are commonplace in centralized and decentralized finance and have gained a new name “pig butchering” first used by Alastair McCready from Vice News. They are usually well organised and do their research on you before any interaction even occurs. Be wary of anyone approaching you with financial investment opportunities, consult third party experts that can verify who it is that you are dealing with. Never proceed with large transactions over phone calls or allow anyone to access your devices with tools like AnyDesk. And your local tax authority will always correspond with you directly in your native language and not English, they also never accept payment with digital assets. Stay vigilant and stay safe.