The U.S. Securities and Change Fee has charged Danh C. Vo, founder and CEO of bitcoin mining firm VBit Applied sciences Corp., with defrauding buyers out of $48.5 million.
In accordance with the SEC, Vo misused the funds for playing, cryptocurrency purchases, and presents to members of the family, whereas deceptive buyers concerning the operations of his enterprise.
The criticism, filed within the U.S. District Courtroom for the District of Delaware, alleges Vo raised over $95.6 million from roughly 6,400 buyers between December 2018 and February 2022.
He bought “internet hosting agreements,” which promised buyers a share of income from bitcoin mining rigs operated by VBit. Most clients selected this passive funding choice reasonably than buying rigs themselves.
Vo misrepresented what number of mining rigs have been truly operational, successfully promoting extra internet hosting agreements than the corporate may assist.
“Whereas some buyers acquired returns, others suffered substantial losses,” the criticism said. Vo both knew or was reckless in not realizing that the corporate couldn’t meet the obligations tied to the internet hosting agreements.
Vo, 37, exercised full authority over VBit, together with its promotional supplies, web site content material, and investor account data.
The SEC mentioned the internet hosting agreements qualify as securities as a result of buyers relied on Vo and VBit’s efforts to generate income.
SEC: Relations acquired misappropriated funds
Along with the misappropriation, Vo allegedly transferred $5 million to members of the family, together with his ex-wife, mom, brother, and sister, the fee mentioned. He reportedly left the U.S. with the remaining misappropriated funds following his divorce in November 2021.
A number of members of the family are named as reduction defendants within the lawsuit and have consented to disgorge the funds they acquired, pending courtroom approval, per the SEC.
VBit was acquired by Superior Mining Group in 2022 and is now defunct. The motion seeks disgorgement of ill-gotten good points, civil penalties, and a ban on Vo from collaborating in future securities choices.
The lawsuit additionally comes as Congress debates federal measures to deal with cryptocurrency scams. A bipartisan proposal would create a devoted job power to establish and tackle fraud within the digital asset sector.
The SEC mentioned they need Vo’s alleged conduct to be a reminder that buyers ought to rigorously consider claims of passive revenue from crypto and ensure that operations are clear and verifiable.
