DMCA Update:  It has come to the attention of the USA Herald that John Monarch has submitted multiple DMCA takedowns in an attempt to suppress this article.   John Monarch does not own the photo in this story nor does he own the derivative of this photo.   

 Alert 1/4/21   The SEC has taken legal action to shut down the Shipchain ICO scam and return money to investors 

According to a lawsuit pending in South Carolina, John Monarch, CEO of Shipchain (which has sold $30M in cryptocurrency this month and is now raising an additional $15M via ICO offerings), is expected to stand trial for his alleged role in a 2013 cryptocurrency blackmail scheme this year.

It is alleged that Monarch, whom is a self-proclaimed cryptocurrency expert, blackmailed Pa. businessman Richard Gorman for $500,000 in cryptocurrency in December, 2013. When Gorman refused to pay the cryptocurrency ransom, the lawsuit alleges that Monarch and co-conspirators waged an online smear campaign against Gorman’s employees, clients, vendors, and children.

Monarch’s co-defendant and one-time best friend, Karl Steinborn, was held liable for $3.1M in damages and subsequently committed suicide in 2016 on Gorman’s birthday.   The case against Monarch, which was originally filed in Federal Court in Pennsylvania, will be tried in Greenville, South Carolina.  Gorman has retained the state’s top litigators, Robert Goings and Kirby Shealy, to try the case.

https://www.azcourts.gov/Portals/0/101/2018/Warner%20Daniel%20Robert%20PDJ-2018-9012%20026503.pdf?ver=2018-08-02-155058-210

According to several legal experts, Monarch’s business partner and attorney, Aaron Kelly, and his law partner Daniel Warner, are facing the most egregious bar complaint seen in years.    It is believed that both attorneys will get disbarred this year.

It may be more than a coincidence that the SEC is now targeting lawyers that are assisting companies like Shipchain that are offering ICO cryptocurrency sales, which the SEC has claimed is a securities violation.   Shipchain’s general counsel, Julian Zegelman, could face legal consequences in his role in the ICO offerings at Shipchain.

“The world’s social media platforms and financial markets are abuzz about cryptocurrencies and initial coin offerings,” Clayton said. “There are tales of fortunes made and dreamed to be made.”

“Investors should understand that to date no initial coin offerings have been registered with the SEC.  The SEC also has not to date approved for listing and trading any exchange-traded products (such as ETFs) holding cryptocurrencies or other assets related to cryptocurrencies. If any person today tells you otherwise, be especially wary.“

Many companies have shied away from the ICO designation, opting instead for “utility ICO” or “token generation event” as to distance themselves from the regulated world of securities. Clayton said games with semantics won’t fly with the SEC.

“Many of these assertions appear to elevate form over substance,” he said. “Merely calling a token a “utility” token or structuring it to provide some utility does not prevent the token from being a security.”

The international nature of cryptocurrencies can also pose a threat to investors, Clayton said:

“Please also recognize that these markets span national borders and that significant trading may occur on systems and platforms outside the United States. Your invested funds may quickly travel overseas without your knowledge. As a result, risks can be amplified, including the risk that market regulators, such as the SEC, may not be able to effectively pursue bad actors or recover funds.”

Earlier this year Monarch had found himself in default due to his lawyers legal errors.  Last month the judge presiding over the case against Monarch in South Carolina set the case on trial, stating that it should be tried on the “merits.”

According to Gorman “There will be a trial.  It will be very public.  And any result less than the forfeiture of all of Monarch’s assets to me will be considered, in my opinion, as a grave miscarriage of justice.”

John Monarch was contacted prior to the release of this article for comment and did not respond.

Have a tip on this case?  Contact us at [email protected].

RELATED ARTICLES:

3/13/18 ALERT!   Forbes takes down Shipchain article after discovering it was allegedly illegally paid for by Shipchain and/or someone at John Monarch’s direction.   The paid Forbes article touted Shipchain was a “revolutionary” company that is one of a “handful of blockchain platforms poised to do things even the Internet couldn’t accomplish.”  

*5/16/18 ALERT!  South Carolina Man Links to $100M+ in Alleged Scams – CLICK TO READ

*5/28/18 ALERT!   John Monarch’s cryptocurrency company, Shipchain, served with Cease & Desist order by South Carolina Attorney General

*7/28/18 ALERT!  South Carolina Attorney General issues a seemingly ominous order after vacating Cease & Desist:  “It does not and should not be interpreted to waive any future causes of action which may be brought as a result of any securities activities of the Respondant (Shipchain), whether detailed in the Administrative Order to Cease & Desist or Not.“

*8/13/18 ALERT!  John Monarch’s business partner and co-founder of Shipchain placed on probation with the Arizona Bar till August of 2020 for role in alleged legal fraud schemes.

*9/12/18 ALERT!  Lawsuit filed against Shipchain and it’s founders: John Monarch, Aaron Kelly, Brian Evans, Sami Rusani

12/29/18  Shipchain ICO investors take to the internet to lament over lost money.