SEC shuts down crypto scam involving millions of dollars

According to an announcement released by the U.S. Securities and Exchange Commission (SEC) on June 19, the authorities have issued a temporary restraining order and an asset freeze order against the Hvizdzak brothers in Pennsylvania for allegedly operating three crypto fraud schemes. According to the SEC, Sean Hvizdzak and Shane Hvizdzak lied about their crypto fund performance by fabricating financial statements and transferring investors' funds into their own accounts at banks and crypto trading platforms.

The U.S. District Court for the Western District of Pennsylvania has ordered the Hvizdzaks, Hvizdzak Capital Management, LLC, High Street Capital, LLC, and High Street Capital Partners, LLC to temporarily cease operations for violating the antifraud provisions of the federal securities laws. The ruling came immediately after the SEC filed an emergency action with the court on June 16. According to the SEC's complaint, the Hvizdzaks began engaging in crypto-related fraudulent activities from at least July 2019 and continued until May 2020. The Hvizdzaks Fund allegedly collected $31 million in funds from a custodial account in March 2019 for "extensive cryptocurrency investments." Hvizdzaks transferred approximately $26 million from the fund's account to personal accounts at banks and popular crypto trading platforms such as Binance, Gemini, and Bittrex.

The SEC said that once the stolen funds are converted into cryptocurrencies such as Bitcoin, they are difficult to trace, allowing the defendants to move digital assets anywhere in the world to evade bank and government regulation.

According to the SEC, the court will consider further asset freezes and the issuance of a preliminary injunction at a hearing on June 30, 2020.

Original link: https://cointelegraph.com