The US Securities and Exchange Commission has charged a California man with conducting two unregistered and fraudulent securities offerings by hosting platforms that allegedly solicited bitcoin and promised false returns.
Ryan Ginster raised about $3.6 million in bitcoin through his websites MyMicroProfits.com and Social Profimatic, according to the SEC's complaint. In both cases, Ginster promised that "cryptocurrency trading and advertising arbitrage" would yield what the SEC called "astronomical rates of return" for customers.
The agency also claims Ginster misappropriated at least $1 million of the funds for personal expenses like tax payments, housing expenses and credit card bills.
The SEC filed the complaint with the US District Court for the Central District of California, charging Ginster with violating the antifraud and registration rules in the Securities Act of 1933 and the Securities Exchange Act of 1934.
As a result, the agency is seeking permanent injunctions against Ginster, as well as disgorgement and civil penalties.