The United States Securities and Exchange Commission (SEC) has dragged another suspected digital asset offender to court. Gabriel Edelman and his companies, Creative Advancement LLC and Edelman Blockchain Advisors, had their day in court “for fraudulently raising funds and misappropriating funds.”
In a statement, the SEC disclosed that Edelman used his companies to offer securities to members of the general public, claiming to invest the funds in digital assets. However, after raising over $4 million, Edelman only invested a portion of the funds in virtual currencies and turned the rest for his personal use.
To keep the scheme running, the SEC notes that the suspect paid a portion of investors in a manner that bears striking similarities with Ponzi schemes. Edelman operated his illegal activity between February 2017 and May 2021, raking hundreds of victims. Many victims had little to no knowledge of virtual currencies and their applications. Instead, they were coaxed into investing in the scheme by Edelman’s promises of sure returns.
The commission is charging the defendant for breaching section 17 (a) of the Securities Act of 1933 and section 10 (b) of the Securities Exchange Act of 1934, dealing with fraud and misrepresentation. Prosecutors are seeking “permanent injunctions, disgorgement with prejudgment interest, and civil penalties from the Defendants.”
Edelman faces a stiff sentence if found guilty, with legal experts predicting up to 21 years in…
