In Brief:
- The SEC charged a Latvian citizen with scamming at least $7 million from crypto investors.
- SEC claimed Auzins was behind an initial coin offering and a purported digital asset cloud mining program-related scam.
- The complaint was filed in the Eastern District of New York in the United States District Court.
The Securities and Exchange Commission (SEC) announced it has charged a Latvian citizen for scamming at least $11M from investors through two fraudulent digital asset schemes.
SEC filed a civil complaint in New York against Ivars Auzins, claiming he was behind an unlicensed initial coin offering and a supposed digital asset cloud mining scheme.
Auzins, a Latvian national, is accused of defrauding the US and overseas investors by using false names, profiles, and fake entities. According to the SEC, he misused nearly all of the funds raised from investors.
According to the SEC, Auzins’ fraud was part of an initial coin offering (ICO) of Denaro, a supposed multi-currency debit card network, that ran from January 2018 to March 2018.
He fraudulently claimed that Denaro allowed customers to keep their digital assets in a secure digital wallet and then spend them “like any other debit card” issued by a credit card company.
Furthermore, from April through July of 2019, Auzins reportedly sold unregistered securities of Innovamine, a cloud mining software.
According to the SEC, he falsely claimed that investors may contribute digital assets to Innovamine, which would then perform mining activities and pay investors a daily “automatic payout… in whichever coin they mine.”
Auzins is accused of stealing more than $7 million from Innovamine and then fleeing with the money. The complaint was filed in the Eastern District of New York in the United States District Court.
The SEC’s complaint charges Auzins of breaching federal securities laws’ anti-fraud and registration requirements and seeks permanent injunctions, including conduct-based injunctions, disgorgement plus prejudgment interest, civil penalties, and an officer-and-director bar.
Kristina Littman, Chief of the SEC Enforcement Division’s Cyber Unit stated, “As we allege, Auzins was engaged in a brazen scheme to defraud retail investors under the guise of profitable digital asset opportunities. We will continue to detect and pursue those that seek to victimize investors in the digital asset space.”
This is not the first time the SEC is charging someone for fraudulent schemes. Earlier in September, SEC charged two people on a fraudulent trading scheme utilizing “meme stocks” to profit from a rise in retail trading fueled by social media in early 2021.
