Film producer Ryan Felton was indicted by a federal grand jury on charges based on two separate crypto-currency investment schemes. The filings show that Felton had promoted initial coin offerings (ICOs) for two entities, FLiK and CoinSpark, in 2017 and 2018.
FLiK was marketed as an entertainment streaming platform, while CoinSpark was founded by Felton as a cryptocurrency trading exchange. The charges are that Felton misrepresented the services and made numerous false claims in order to increase the price of the coin offerings. One such bogus claim made was that all money raised would go towards the launch, development, and support of the two platforms, with significant investments already raised through private investors. Before getting into further details of these claims, it is important to note that cryptocurrencies are actively used in the gaming industry, especially in crypto casinos. Therefore experts from Winz Casino have commented on this case and made it clear that people should be very careful when playing in bitcoin slots or investing in cryptocurrency schemes. The popularity of cryptocurrency in online casinos has never been higher, especially due to the sharp price increases which have been seen in the recent past, and so as more and more people look to use bitcoin or ethereum in online casinos or invest in the space, the likelihood of fraudulent offerings will also increase. Cryptocurrency has become akin to the next ‘gold rush’, with everyone trying to find the next big crypto after the likes of bitcoin and ethereum, and so the number of coin offerings have gone up dramatically, with many companies and even some countries looking to enter the market. This has made the market quite crowded, making it difficult to judge the authenticity of the various ICOs, and therefore making it easier for malicious operators to set up schemes such as these to rob and defraud investors easily.
Felton was also charged with using multiple fake names and profiles on social media in order to promote interest, spread false information and build up attention for CoinSpark. Felton secretly sold thousands of coins on secondary crypto markets after the end of the ICOs in order to take advantage of the artificially increased coin prices, with the funds raised then being transferred into his personal accounts, despite them being investor money. He then used this money to fund his lavish lifestyle, including buying a $1.5 million house, and a cash purchase of a Ferrari 599 GTB Fiorano Coupe for $180,000.
This is just the latest example in a growing number of fraudulent activities and cases being seen in the crypto space. The fact that crypto is so lucrative makes it an attractive target for such malicious attempts, as many people are investing money into crypto without doing due diligence. The very aspects that make crypto attractive, such as its speed, reliability and anonymity of transactions, make it perfect for fraudulent operators as well, as it can be extremely difficult to track and trace fraudulent transactions. Users are thus asked to be extremely careful when selecting crypto investments, and also look to the past history of the promoters and the companies making the coin offerings before making an investment.
