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Ormeus Coin scam: SEC prosecutes siblings in crypto mining fraud over $124 million

Because of their alleged activities in the Ormeus Coin ICO, the brother and sister duo will face penalties for bank fraud, securities fraud, and conspiracy.

The US government has filed criminal charges against two siblings for allegedly perpetrating fraud in the Ormeus Coin scam. The Securities and Exchange Commission (SEC) prosecuted siblings John Albert Loar Barksdale and JonAtina (Tina) Barksdale for breaching federal securities laws and cheating at least 12,000 “retail investors out of more than $124 million crypto mining scam on March 8. Both of the Barksdale siblings are citizens of the United States. According to sources, John was found in Thailand and JonAtina in Hong Kong.

Beginning in 2017, there were two Ormeus Coins (ORME). According to the SEC complaint, the Barksdales misled investors about the quantity, value, and supposed profitability of Ormeus Coin’s cryptocurrency mining assets. ORME is an ERC-20 token and a BEP-20 token that can be found on Ethereum (ETH) and the Binance Chain (BNB).

While both siblings made social media postings and videos to promote the initiative, only John travelled to roadshows and conferences to do so. Melissa Hodgman, Associate Director in the SEC’s Division of Enforcement, compared John to a “snake-oil salesman.” She further claimed that both siblings utilised social media, advertising websites, and in-person roadshows to deceive retail investors for their own personal gain.

Hodgman also confirmed the SEC’s stance on cryptocurrency scammers, stating that it will continue to aggressively investigate those who offer securities in schemes to deceive the investing public, regardless of the label the promoters use on their goods. Both the SEC and the DOJ are charging the Barksdales with fraud based on alleged misrepresentations they made to investors regarding the health of the Ormeus mining business. 

According to the Oremus Currency website, mining activities for the coin began in November 2017 with actual Bitcoin (BTC), Litecoin (LTC), and Dash (DASH) mining machines. The Barksdales stated that the project had spent $250 million on the mining operation that supported ORME and that it generated $5 million in monthly income.

The startup reportedly deceived investors by claiming its vault wallet was worth over $190 million in November of last year. The display, however, was allegedly set up through a different website that displayed the value of an unconnected wallet. According to the SEC, the project’s genuine wallets were valued at less than $500,000. According to the DOJ, the mining enterprise never achieved a value close to $250 million and never earned revenues surpassing one million dollars in any month.

A court date will be scheduled while the Barksdales are being detained in jail. A recent ruling by the 11th Circuit Court of Appeals may give the SEC additional power in this case by allowing prosecutors to present a larger variety of evidence. On Feb. 18, the court overturned an intermediate court judgement that barred prosecutors from using footage in the securities fraud case against the BitConnect founders.

The SEC has been wary of widespread advertising strategies in the cryptocurrency market, questioning whether they constitute securities fraud. According to reports on March 3, the Commission is currently targeting non-fungible tokens (NFT) used for fundraising purposes “like traditional securities.”

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Vaishali Goel
Technology enthusiast, explorer and academic scholar. Currently exploring the crypto world. Join me in my journey to see how crypto, NFT and Metaverse will change the world.
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