The U.S. Securities and Exchange Commission (SEC) sues a California resident for allegedly conducting a multimillion-dollar cryptocurrency pyramid scheme, as per the press release published on May 23.
The SEC files an injunction against Daniel Pacheco, alleging that he sold unregistered securities through IPro Solutions LLC and IPro Network LLC, from January 2017 through March 2018. Pacheco fooled the investors by promising them “points” which could later be converted into the companies digital asset PRO Currency, siphoning off $26 million in the process.
Further, like any pyramid scheme, the investors were also promised additional points or cash commissions as and when they recruit new members to the network. Michele Wein Layne, director of the SEC’s Los Angeles Regional Office, said in a statement that the Pacheco “hid an old fraud under the guise of cutting-edge technology,” adding:
“He enticed investors by offering them the opportunity to speculate in cryptocurrency, when in fact he was simply operating a pyramid scheme.”
Pacheco has allegedly re-directed the funds raised in purchasing a $2.5 million home and a Rolls Royce, resulting in him being unable to pay his investors’ cash commissions or other bonuses.
The SEC stated in the release that:
“Pacheco’s offer and sale of IPro instructional packages constituted an unregistered sale of securities because the IPro instructional packages involve (i) an investment in a pyramid scheme; and/or (ii) an investment in the PRO Currency digital assets, and therefore must be registered with the SEC unless an exemption applies.”
As for its actual complaint, the regulator lists seven entities or people that allegedly possess funds belonging to IPro’s investors, though they are not accused of any wrongdoing. As per the data site, CoinMarketCap lists ProCurrency, trading around 0.196 cents as of press time, though if this is the same cryptocurrency that is involved in the scheme.