Entrepreneur Diana Mae Fernandez is facing charges from the Securities and Exchange Commission (SEC) for allegedly defrauding investors through promises of substantial returns from crypto investments while misappropriating the funds for personal use.
What Happened: The SEC alleged that Fernandez conducted a fraudulent securities offering, reported The Block reported on Thursday. Fernandez, aged 37, lured investors with the promise of up to 63% returns by investing in cryptocurrencies, real estate, and a mix of private and publicly traded companies.
The SEC, which has deemed her as a “self-styled entrepreneur,” filed a complaint on Dec. 21 in the Northern District of West Virginia, stating that Fernandez collected roughly $364,000 from no less than 20 investors via two entities, “The Self-Made Success” and “Diana Mae K., LLC.”
The SEC claims that Fernandez used the investment funds for personal expenses and made Ponzi-like payments to earlier investors. She allegedly misrepresented herself to have over 15 years of investment experience and a track record of raising $100 million across 25 countries.
Previously, in July, U.S. prosecutors charged Fernandez with investment fraud. She was apprehended in Serbia and is now potentially facing a maximum of 20 years in prison for each of the five counts.
Why It Matters: This incident adds to the SEC’s recent regulatory activities in the crypto space. On Dec. 28, a U.S. federal judge sided with the SEC against Terraform Labs and its founder, Do Kwon, over the alleged offering and sale of unregistered securities. The SEC’s accusations of fraud in the case are scheduled for trial on Jan. 29.
Meanwhile, the SEC earlier this week interacted with major firms, including BlackRock Inc., to discuss proposed Bitcoin BTC/USD ETFs, setting Dec. 29 as the deadline for final amendments.
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