Federal regulators accuse 2 siblings in $124M crypto scam

In their latest case targeting alleged fraud in cryptocurrency, federal regulators have accused two siblings of defrauding thousands of ordinary investors out of some $124 million in unregistered securities offerings involving a digital token

WASHINGTON -- In their latest case targeting alleged fraud in cryptocurrency, federal regulators have accused two siblings of defrauding thousands of ordinary investors out of some $124 million in unregistered securities offerings involving a digital token.

The SEC suit filed in federal court in Manhattan accuses the siblings of violating federal securities laws and seeks unspecified civil penalties and restitution.

In addition, federal prosecutors in Manhattan announced Tuesday that John Barksdale has been arrested and charged with criminal securities fraud.

John and JonAtina Barksdale couldn’t be located for comment; the SEC said it wasn’t known whether they were represented by attorneys.

The SEC has warned investors to be wary of potential investment scams involving cryptocurrencies and of investing based on social media.

SEC Chairman Gary Gensler said last year that investors need more protection in the cryptocurrency market, which he called “rife with fraud, scams and abuse.”

Digital currencies such as bitcoin have been left largely unregulated by major governments. The SEC has brought and won dozens of fraud cases against cryptocurrency promoters, but Gensler said the agency needs greater authority from Congress, and more resources, to regulate the crypto markets.

The Biden administration has asked Congress for legislation to expand government regulation of stablecoins, a form of cryptocurrency that is pegged to a specific value, usually the dollar or another currency, or gold.