(Bloomberg) — A pair of siblings made false statements about a cryptocurrency and defrauded thousands of mom-and-pop investors out of more than $124 million, according to a federal regulator.
Starting in June 2017, John Barksdale, 41, and his sister, JonAtina, 45, lied to investors about the Ormeus Coin and falsely promoted the token as being backed by one of the largest crypto mining operations in the world, according to a statement from the Securities and Exchange Commission. John Barksdale, a U.S. citizen living in Thailand, was arrested abroad on Tuesday for making false statements, according to a separate filing from the Justice Department.
The Barksdales lured investors with social media posts, videos and road shows around the world, according to the SEC. The siblings marketed their trading platform as a way to earn passive returns of up to 160%. Federal agencies have been warning individual investors for years about the risks of trading crypto, which often has fewer protections.
Read more: It’s a Very Crypto Scandal, But the Charges Are Serious
The Ormeus Coin was at one point advertised on a jumbotron in New York City’s Times Square, according to the Justice Department. The ad misrepresented the value of the token’s revenues, mining operations, and featured misleading claims about how the company owned the Bitcoin stored in its vault.
“We allege that the Barksdales acted as modern-day snake-oil salesmen, using social media, promotional websites, and in-person roadshows to mislead retail investors for their own personal benefit,” said Melissa Hodgman, an associate director in the SEC’s enforcement division.
A lawyer for the Barksdales could not be immediately identified, according to the SEC.
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