Authorities in the United States have filed charges against the alleged orchestrator of five digital currency scams that net him $5 million. Ryan Ginster is charged with violating the Securities Act by promising investors huge returns from digital currency trading and arbitrage but taking off with their investment.
Ginster was arrested recently in Los Angeles, following the filing of charges against him in San Francisco. According to the Department of Justice, the 34-year-old California resident engaged in a web of deceit that spanned three years, from February 2018 to earlier this year.
At the time, Ginster allegedly ran five websites, all geared towards luring investors with promises of grandeur. One of these was Social Profimatic, a website that promised incredible returns of at least 8% daily with little or no risk for investors. Investors could only buy in through digital currencies. This scam managed to raise as much as $844,000 from an undisclosed number of investors. It would then shut down without warning just 38 days after launch.
Ginster allegedly operated similar scams, including eProfit Hub, My Micro Profits, Automatic Bitcome, and Your Net Profits. Their common aspect was the promise of ludicrous guaranteed returns to lure the investors. They all shut down just weeks after launch, with Ginster taking off with the money in every case, investigators said.
According to the DoJ, Ginster’s scams brought him $5 million.
The Securities and Exchange Commission (SEC) filed similar charges against Ginster. However, the SEC had a more conservative figure of the funds lost at $3.6 million to the scam.
“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,” Michele Wein Layne, the Regional Director of the SEC’s Los Angeles Regional Office, commented.
While the SEC charges Ginster with violating the Securities Act, the DoJ charged him with one count of wire fraud which carries a maximum of 20 years in prison. It also charged him with six counts of money laundering, each having a maximum of 10 years in prison.