The two creators of Ormeus Coin will be held accountable for defrauding investors with false promises on successful cryptocurrency mining operations and high returns.
Cryptocurrency projects have been plagued by fraudulent activity, with rug pulls taking the cake. However, long-term crypto fraud schemes, or "slow rugs" have drawn the attention of law enforcement as they tend to be more sophisticated.
Based on the report by Reuters, the US Department of Justice (DOJ) charged two siblings John and JonAtina Barksdale for conspiracy, and two counts of wire and securities fraud since 2017.
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The duo apparently orchestrated a fraudulent initial coin offering (ICO) called Ormeus, and raked in approximately $124 million since launch. According to the DoJ, the offered tokens were meant to be used as funds for the siblings’ mining operation.
They advertised their mining farm to be valued at $250 million which generates more than $5M in revenue every month. By promoting their coin on social media and live shows, the Barksdales brought in more than 20,000 investors, allegedly spending millions solely on marketing.
The project was even advertised at Times Square in Manhattan as the "$250 Million Cryptocurrency Mining Farm Revealed in Legal Audit by Ormeus Coin", sharing the title with an earlier press release published on PR Newswire by the creators themselves back in 2018.
According to the SEC, in recent times, John Barksdale had been living in Thailand, while his sister JonAtina resided in Hong Kong. Even though the two were part of the same fraud scheme, they were given separate charges.
Funnily enough, Associate Director of the SEC Enforcement Division Melissa Hodgman called the two perpetrators "modern-day snake-oil salesmen" by offering products that are really not as advertised, or, in this case, non-existent.
With John Barksdale being arrested, he is now facing 65 years behind bars for several counts of fraud and conspiracy, and being dishonest about the actual profitability of the project in order to lure in investors. His sister's fate is yet to be disclosed.
By looking at the data displayed by CoinMarketCap, the Ormeus Coin skyrocketed in mid-November of 2017, going from about $0.4 to almost $5 in a matter of weeks. It seems that the coin was slowly rugged up until mid-2018 when the price reached the lowest of lows.
At the moment of writing this article, the coin is worth less than a fraction of a penny.
