Behold, Ormeus Coin! A glittering token, a financial wonder of the world, and yet another grand example of what cryptocurrency can offer the world.
…Or, as federal officials see it, a massive scam that suckered tens of millions of dollars out of hapless investors via fraudulent marketing.
Ormeus is a cryptocurrency that was launched in 2017, the brainchild of John and Tina Barksdale — two siblings and self-identified crypto marketers — who are now facing federal securities charges in connection with their business. In a complaint unsealed Tuesday, the Securities and Exchange Commission charged the siblings with defrauding their investors out of $US124 ($172) million. In an accompanying federal indictment unsealed the same day, the Justice Department announced multiple charges against John Barksdale — wire fraud, conspiracy to commit wire fraud, conspiracy to commit securities fraud. Both agencies allege that the duo used misleading and outright fraudulent marketing techniques to lure in investors to a coin that wasn’t nearly as valuable as they claimed.
“As alleged, Barksdale operated like a travelling salesman and peddled lies, overstatements, and misrepresentations regarding a cryptocurrency called Ormeus Coin, which resulted in duping thousands of investors throughout the world,” said Ricky J. Patel, Homeland Security Investigations New York Special Agent in Charge, in a statement.
According to officials, the Barksdales claimed that their business was supported by “one of the largest crypto mining operations in the world” and that the company was raking in monthly mining revenue between $US5.4 ($7) and $US8 ($11) million. The Barksdales also heralded their token as a “new digital money system backed by a fully-audited industrial crypto-mining operation.”
But, according to federal officials, most of those claims were BS. Officials say the Ormeus mining operations shut down in 2019 after drawing too little money, that it never reached even a million dollars per month. According to the DOJ, John Barksdale claimed to have $US250 ($347) million worth of Bitcoin stored at the mining operation that would secure the token’s value. In reality, the coins belonged to someone else, the indictment states. The indictment against him claims that misrepresentations and fabrications about the coin’s value were promoted via Ormeus Global, a multi-level marketing company that used false and manipulative advertising to encourage hapless investors to go all-in on the coin.
The Ormeus slogan, “E Pluribus Aurum Facit — Out of Many, One Makes Gold,” rings a bit ironic in light of the charges, though Ormeus would hardly be the biggest crypto-related scandal of the past year — or even of this year.