The United States Securities and Exchange Commission has launched a lawsuit against two advisory companies and their owner for running a Ponzi-like cryptocurrency scheme. The firms operated for over four years and manage to accrue nearly $4.4 million in profits over the period of their operations.

The lawsuit is against Creative Advancement LLC and Edelman Blockchain Advisors LLC also including their owner – Gabriel Edelman. The allegations claim that Edelman fraudulently offered and sold securities through his companies using false and misleading statements between February 2017 and May 2021. The lawsuit also claims that Edelman is currently residing in Spain.

The SEC believes he raised $4,390,000 from at least four investors through his fraudulent securities offerings in those four years. Edelman also promised that these funds will be invested in cryptocurrencies, which would have been purchased at discounted promises. He failed to deliver on these promises which he continued to make until the SEC caught up with him.

The Securities and Exchange Commission alleged that he invested only a very small portion of investor funds in digital assets and used the majority to fund his own personal benefit including paying off credit cards and sending money to family members. He was not however described as being extravagant with the funds

The SEC additionally stated that Edelman operated a “Ponzi-like” scheme, paying early investors with some of the new investors’ funds to encourage them to make larger investments. The agency’s lawsuit also alleges that Edelman committed securities fraud and requested the court to permanently sanction him from engaging in the acts, practices, and courses of business alleged in the suit.

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