ICO Pitchmen Sentenced to Prison for $1.9 Million Crypto Fraud

Two crypto founders received federal prison sentences on Monday for defrauding investors of $1.9 million. According to a statement issued by the U.S. Attorney’s office in California, Jeremy McAlpine and Zachary Matar were found guilty of securities fraud and given sentences of 3 years and 2.5 years in prison, respectively. ICO Craze of 2017 McAlpine and Matar formed Dropil, a cryptocurrency startup based in Belize but operating out of Fountain Valley, California, during the 2017 crypto ICO boom. Dropil developed a crypto trading program, an altcoin called DROP, and an automated trading bot called Dex that used DROP. According to the press announcement, McAlpine, Matar, and Dropil “made misleading claims to investors,” stating that Dex would produce yearly returns of 24-63%. They also failed to register DROP with the Securities and Exchange Commission (SEC). McAlpine and Matar “fabricated bogus Dex profitability reports,” according to subpoenas they received, giving the impression that Dex was “functional and successful.” Further fictitious documents were produced, stating that Dropil had raised $54 million from 34,000 investors when it had only raised less than $2 million from fewer than 2,500. Fraudulent Crypto Pyramid and Ponzi Scheme The pair were sentenced on Monday, more than two years after the SEC initially accused them of scamming investors and a year after McAlpine and Matar pleaded guilty to one count of securities f...