Back in April 2020, the US Securities and Exchange Commission (SEC) accused the founders of the cryptocurrency startup Dropil of a $ 1.8 million fraudulent ICO.They have now pleaded guilty to the crime.
California residents Jeremy McAlpine and Zachary Matar are due to sign confessions in the coming days. According to prosecutors, McAlpin and Matar sold DROP tokens to thousands of investors, and the proceeds were supposed to be used to trade in the cryptocurrency market using bots.
“To sell tokens and attract investors, McAlpin and Matar posted a series of false statements on their website and through their Twitter account. They faked the results of trading on decentralized exchanges to give the impression that their strategy is working and profitable. The sales volumes of DROP tokens were also falsified – the founders of the startup announced that they received $ 54 million from 34,000 investors, although in total $ 1.9 million were received from 2,500 people, ”the US Department of Justice said in a statement.
The unregistered ICO ran from January to March 2018. According to prosecutors, the defendants received $ 1,896,657 from 2,472 investors, with approximately 629 million DROP tokens sold. McAlpin and Matar used at least $ 1.6 million of the funds received to pay themselves and partners.
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