2024-12-12 19:15 |
The U.S. Securities and Exchange Commission charged three individuals on Dec. 11 with impersonating securities brokers and investment advisers to execute a scheme involving digital assets.
The complaint names three Nigerian nationals and alleges that their actions diverted more than $2.9 million from at least 28 investors by directing them toward fraudulent platforms, then instructing them to purchase Bitcoin at legitimate brokerages or crypto exchanges before transferring the funds to blockchain addresses linked to the defendants.
Per the SEC, the defendants allegedly created websites impersonating multiple professionals associated with established U.S. firms and used voice-modification software, as well as online group chats and social media, to cultivate trust and drive interest in their purported trading expertise.
An Investor.gov alert stated impersonation scams appear to be increasing in sophistication due to technological advancements, including the use of AI-driven content and deepfake audio or video. The alleged scheme, in this case, reportedly encouraged investors to research identities lifted from the public records of actual investment professionals.
The operators then set up fake investment account interfaces showing unrealized gains, prompting victims to contribute additional funds. Although participants saw purported monthly returns of up to 25%, funds were never invested as claimed and attempts to withdraw assets led to demands for further fees.
Regulatory units with crypto-specific mandates, including the SEC’s Crypto Assets and Cyber Unit, were involved, indicating that such enforcement actions increasingly target areas where traditional fraud methods intersect with decentralized financial networks and digital asset platforms.
Voice-changing software and spoofed phone numbers made it difficult for investors to verify identities, and the perpetrators’ use of encrypted messaging apps and social platforms allowed them to operate outside traditional brokerage environments. Their reliance on digital assets, primarily Bitcoin, added layers of complexity, including blockchain transfers and multiple addresses, complicating asset tracing for the SEC.
As the SEC reported, the defendants purchased online domain names and leveraged third-party commentary, chat groups, and investment forums to funnel attention toward their false personas.
According to the complaint, investors were often directed to download trading apps under the guise of accessing unique copy trading systems or algorithmic strategies, yet no legitimate activity took place. Instead, the funds were rapidly moved and rendered unrecoverable.
The SEC, working in parallel with the U.S. Attorney’s Office for the District of New Jersey has charged all three defendants with multiple violations of federal securities laws and seeks permanent injunctions, disgorgement with prejudgment interest, and civil penalties.
The alert by the Office of Investor Education and Advocacy, prepared in collaboration with the FBI, recommends verifying identities through sources like Form CRS and publicly available databases, avoiding unverified contact details, and maintaining heightened vigilance when prompted to send funds via crypto.
The SEC’s legal action and the related investor warning reflect an enforcement environment adapting to evolving tactics that leverage crypto markets. The agency’s complaint, filed in the U.S. District Court for the District of New Jersey, requests penalties and remedies designed to halt further misconduct and recover stolen funds.
The post SEC charges three people for impersonating securities brokers in $2.9 million Bitcoin-related scam appeared first on CryptoSlate.
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