Brother and Sister Charged with $124M Crypto Fraud
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Brother and Sister Charged with $124M Crypto Fraud

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9 months ago

John and JonAtina Barksdale are accused of selling Ormeus Coin via crypto trading platforms — and running a multi-level marketing business.

Brother and Sister Charged with $124M Crypto Fraud

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A brother-and-sister duo have been charged with defrauding thousands of retail investors out of $124 million.

John and JonAtina Barksdale are accused of selling Ormeus Coin via crypto trading platforms — and running a multi-level marketing business.

The U.S. Securities and Exchange Commission alleges that they falsely claimed that Ormeus Coin was supported by one of the world's largest crypto mining operations.

Promotional materials distributed to investors claimed that the project was underpinned by a business that was generating up to $8 million a month in mining revenues.

Wallets were also presented that appeared to show the company had assets of $190 million, even though less than $500,000 was actually stored in Ormeus wallets.

The Barksdales have also been accused of manipulating the price of Ormeus and misusing "millions of dollars of investor funds for personal expenses," with SEC associate director Melissa Hodgman saying:

"We allege that the Barksdales acted as modern-day snake-oil salesmen, using social media, promotional websites, and in-person roadshows to mislead retail investors for their own personal benefit."

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Criminal Charges Also Filed

In other developments, John Barksdale has been arrested abroad and charged with cryptocurrency securities fraud — with U.S. prosecutors claiming he encouraged investors to buy ORME tokens through a "web of lies." Ricky J. Patel from Homeland Security Investigations added:

"As alleged, Barksdale operated like a traveling salesman and peddled lies, overstatements, and misrepresentations regarding a cryptocurrency called Ormeus Coin, which resulted in duping thousands of investors throughout the world."

According to the U.S. Justice Department, Ormeus Coin was also advertised in Times Square, where false claims about the size of the project were repeated.

Estimates suggest that at least 12,000 people invested in ORME between June 2017 and October 2021 — including over 200 in the U.S. — and many of them would have been swayed by the "false representations regarding the size, value and purported profitability" of the mining operation that Ormeus supposedly controlled.

Established in the middle of the boom in initial coin offerings in 2017, Ormeus Coin's market capitalization reached an all-time high of $52 million in January 2018. Many crypto projects released around that time ended up peaking in the same month, just before a dramatic crash.

Ormeus Coin's website is still live — and continues to claim that its Bitcoin, Litecoin and Dash mining rigs are "powered by green energy," with 40% of all crypto generated through its equipment reinvested into purchasing more hardware. In proclamations that appear to good to be true, the site adds:

"A custom-built Artificial Intelligence engine optimizes mining activity for Ormeus by selecting the most profitable mainstream crypto coins to mine at any given time."

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