The US SEC is accusing the former correctional officer for his role in the bizarre altcoin scam. John A. DeSalvo allegedly demanded ICO money from the police and organized a ‘pump and dump’ on PancakeSwap shortly thereafter.
SEC accuses this altcoin founder of crypto scam
John A. DeSalvo, a former lieutenant in the New Jersey Penitentiary, has been accused by the U.S. Securities and Exchange Commission (SEC) of orchestrating a crypto fraud that specifically targets police officers and first responders. According to the August 23 statement, DeSalvo sold its own Blazar token from November 2021 to May 2022. Through this altcoin sale, it raised $623,388 from 222 investors. DeSalvo said Blazar will “replace traditional state pension systems” for police, firefighters and paramedics. Thus, it declared that it would generate lucrative returns. DeSalvo allegedly told investors:
Blazar Token is the first token or cryptocurrency that can be purchased through the payroll deduction every week. The pension will be taken pre-tax from the individual’s weekly earnings, similar to payments to a 401k, IRA, or other retirement savings plan.
How did the fraud incident take place, according to the SEC?
“We have become a securitized token with the SEC,” De Salvo said with the intent to deceive investors while making demands. However, it has never registered with the regulatory body for the respective altcoin project. He also told investors that there was an initial “lock-in” period for insiders. Despite this, DeSalvo sold 41 billion Blazar Tokens, worth $51,000 at the time, when it was first launched on the decentralized exchange PancakeSwap in May 2022.
Investors are prohibited from selling Blazar tokens while DeSalvo is selling. Less than two weeks after DeSalvo’s PancakeSwap sale, the altcoin has lost more than 99.9% of its value as of May 22. Regarding the matter, the SEC wrote:
DeSalvo’s massive sales volume put downward pressure on the transaction price of Blazar Token. It also consumed most of PancakeSwap’s investment liquidity, causing it to collapse and cause significant investor losses.
Regulatory authority does not turn a blind eye to the crypto world!
The SEC is seeking a permanent injunction banning securities offerings against DeSalvo. It also wants civil penalties and compensation for damages. As you follow on Kriptokoin.com, the SEC has been increasing the pressure on the crypto market lately. In this direction, the market is closely following the war it wages especially against Ripple. Because there will be a precedent for whether altcoin projects are securities or not.
