SEC targets crypto multi-level marketing scheme in new lawsuit

The U.S. Securities and Exchange Commission said Friday that it filed charges last month against three individuals who allegedly  cryptocurrency investment scheme.

The complaint, filed under seal on May 7, targets Modern Money Team (MMT), which it describes as a "multilevel marketing business" that defrauded investors of more than $12 million. MMT describes itself as a "trading community" on its official website, offering products related to binary options, forex and crypto.

As the agency's press statement notes:

"The SEC's complaint, unsealed today in federal court in Salt Lake City, alleges that, beginning in at least July 2017, Putnam operated a multilevel marketing business known as "Modern Money Team" and sold interests in a purported cryptocurrency mining operation to nearly two hundred investors. According to the complaint, Putnam misappropriated some of these investor funds and spent them on a condominium and other personal expenses. The complaint alleges that Putnam, Ramirez, and Rodriguez, then raised additional funds by offering so-called "cryptocurrency trading packages" to investors with the potential for high returns. In reality, as alleged, the defendants misappropriated investor funds for personal use and to make Ponzi-like distributions to earlier investors."

Along with Daniel Putnam, Jean Paul Ramirez Rico and Angel Rodriguez, two business entities — MMT Distribution and R&D Global — are named in the complaint. 

The full complaint can be found here.