The Securities and Exchange Commission (SEC) filed a lawsuit against Donald G. Blakstad for partially scamming investors through an allegedly fraudulent operation of crypto-mining. SEC Charges Alleged Fraudster Behind Crypto Mining Scam.
The SEC charged that through three different companies, Blackstad, 60, raised more than $3.5 million from investors. Investors gave about $3.544 million to Blakstad between at least July 2015 and May 2019.
The regulator further claimed that Blakstad maintained the ruse by issuing $60,000 as returns on their investments to each of the five investors.
Specifically, the crypto-mining operation took around $550,000 from five independent investors, while Blakstad used nearly half of the cash in casinos, restaurants, and hotels for himself.
In 2019, the SEC also charged Blakstad with insider trading, as detailed in the commission’s statement on July 10.
Blakstad bribed accountant Martha Patricia Bustos for information about her employer, Illumina Inc. according to reports. The SEC further added that Blakstad used to profit in the stock market from the private information he obtained from Bustos,.
The SEC, in an official statement, said:
“Investors made their investment with a reasonable expectation of profits to be derived solely from Blakstad’s alleged ability to generate profits without any participation by any of its investors. Blakstad and Xact Holdings engaged in the offer and sale of the securities of Xact Holdings by use of the means or instruments of transportation or communication in interstate commerce, the instrumentalities of interstate commerce, and/or by use of the mails”.