The US Securities and Exchange Commission (SEC) has sued two crypto advisory firms and their owner for alleged fraud.
The charges were filed against Gabriel Edelman and his affiliated entities Creative Advancement LLC and Edelman Blockchain Advisors for misappropriating investors’ funds that were promised to be invested into digital assets.
A reported $4.3m was raised by offering and selling securities to four investors using “false and misleading statements” between February 2017 and May 2021.
The statements pledged to invest in digital assets but Edelman used investors' funds for his own personal expenses.
The complaint against Edelman stated he used “Ponzi-like” activities on investors by sending early repayments to lure them into depositing larger amounts into the scheme.
The investors were described as elderly and “relatively unknowledgeable” about cryptocurrencies or how to use them.
Currently, the SEC is carrying out court orders to stop fraudulent firms in their quest to exploit investors and relinquish any profits made by illicit activities and illegal transactions.
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