Additionally, the SEC alleged that Krstic and DeMarr promoted the unregistered ICO of Bitcoiin2Gen for its B2G tokens. Enos allegedly drafted the fraudulent promotional materials about B2G tokens. The materials stated that that B2G tokens would be deliverable on the Ethereum blockchain used to develop a cryptocurrency coin that was “mineable” and the tokens would be traded on a proprietary cryptocurrency trading platfom in early 2018.
Furthermore, the Commission alleged that Bitcoiin2Gen was a “sham” and all of the claims by the defendants about B2G tokens were “false.”
Krstic and DeMarr used millions of dollars of investoirs funds for their personal benefits. They violated the antifraud and registration provisions of the federal securities laws. Enos aided and abetted the antifraud violations, according to the SEC.
In a statement, SEC Enforcement Division Cyber Unit Chied Kristina Littman said, “The conduct alleged in this action was a blatant attempt to victimize those interested in digital asset technology and these defendants should be held accountable. In reality, we allege, these ventures were fraudulent enterprises aimed simply at misappropriating funds from investors.”
Justice Department’s parallel lawsuit against John DeMarr
In a parallel lawsuit, the the U.S. Attorney’s Office for the Eastern District of New York and the Department of Justice, Fraud Section accused DeMarr of engaging in a coordinated cryptocurrency and securities fraud scheme.
