The United States Securities and Exchange Commission (SEC) has started court proceedings against California resident for illegally running a Cryptocurrency pyramid scheme, as per the press release on May 23. 

The SEC declared on Thursday that it has filed for charges against Daniel Pacheco for conducting a  fraudulent, unregistered offering of securities via two California-based firms, IPro Solutions LLC and IPro Network LLC, from January 2017 to March 2018.

The companies have collected more than $26 million from investors who obtained "points" which can later be converted into a PRO Currency, a digital asset affiliated with the firms.

Apart from this, Investors who have contributed additional funds will be able to earn extra points or cash commissions by recruiting new investors into the network. Michele Wein Layne, who is the Director of the SEC’s Los Angeles Regional Office, said:

“We allege that Pacheco hid an old fraud under the guise of cutting-edge technology. He enticed investors by offering them the opportunity to speculate in cryptocurrency, when in fact he was simply operating a pyramid scheme.”

The SEC has also filed charges on Pacheco for diverting investors funds by purchasing a $2.5 million home and a Rolls Royce automobile. Due to this, he was not able to pay his investors' cash commissions and other bonuses.

In its release, SEC stated that “Pacheco’s offer and sale of IPro instructional packages constituted an unregistered sale of securities because the IPro instructional packages involve (i) an investment in a pyramid scheme; and/or (ii) an investment in the PRO Currency digital assets, and therefore must be registered with the SEC unless an exemption applies.”

Before few days, the SEC has stopped a Crypto Ponzi Scheme after it collected funds worth $30 million. The owner behind the Arygle Coin, Jose Angel Aman was charged for running a Ponzi Scheme using funds he obtained from investors in his supposed diamond resale outfit. 

In April 2019, SEC has decided to hire a faithful staff member to provide expertise on cryptocurrency, who will serve different consulting roles. Duties mainly include “engage with other Divisions and Offices on such matters; serve as the Division's point of contact for domestic and international regulators, market participants, and the public; provide expert level comment on policy and workstreams.”