SEC Charges Promoter with Conducting Cryptocurrency Investment Scams
Washington, D.C.--(Newsfile Corp. - November 18, 2021) - The Securities and Exchange Commission today announced that it charged Ryan Ginster of Corona, California with conducting two unregistered and fraudulent securities offerings that raised over $3.6 million in cryptocurrency from retail investors.
The SEC’s complaint alleges that, from 2018 to 2021, Ginster raised approximately $3.6 million in Bitcoin through two online platforms—MyMicroProfits.com and Social Profimatic—that promised astronomical rates of return by falsely claiming returns through, amongst other activities, purported "cryptocurrency trading and advertising arbitrage." The complaint also alleges that Ginster deceived investors in both offerings about, among other things, how their funds would be used, because Ginster misappropriated at least $1 million of the funds raised to pay personal expenses, including tax payments, housing expenses, and credit card bills.
"Defendant Ryan Ginster allegedly engaged in a fraudulent scheme raising millions in cryptocurrency using online investment programs and then converted the cryptocurrency for his own benefit," said Michele Wein Layne, Regional Director of the SEC’s Los Angeles Regional Office. "Individuals who hide behind the anonymity of cryptocurrency transactions to defraud investors should expect that the SEC will trace their illegal activity and hold them accountable for their actions."
The complaint, filed in the U.S. District Court for the Central District of California, charges Ginster with violating the antifraud and registration provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. The complaint seeks permanent injunctions, disgorgement with prejudgment interest, and civil penalties.
The SEC’s investigation was conducted by Peter Del Greco of the SEC’s Los Angeles Regional Office and supervised by Finola H. Manvelian. The SEC’s litigation will be led by Kathryn Wanner and supervised by Amy Jane Longo. The SEC acknowledges the assistance of the Internal Revenue Service and the United States Attorney’s Office for the Northern District of California. In a parallel action, the U.S. Attorney’s Office for the Northern District of California today announced criminal charges against Ginster.
The SEC’s Office of Investor Education and Advocacy has issued an Investor Alert warning investors about digital asset and cryptocurrency investment scams. Investors can find additional information about investments involving digital assets on Investor.gov.