The Securities and Exchange Commission charged Las Vegas, Nevada resident Emiliano S. Ryn and his company GexCrypto Corp. with defrauding members of the Filipino community in a scheme involving crypto assets.
According to the SEC’s complaint filed in the United States District Court for the District of Nevada, Ryn presented himself as a successful Filipino entrepreneur in the cryptocurrency space who could help the members of his community also become rich through investing in GexCrypto, a purported first-of-its-kind crypto asset trading platform, and in a second crypto asset mining business. From late 2017 through mid-2018, Ryn allegedly raised over $800,000 from 26 investors, some of whom took out home equity loans in order to invest. According to the complaint, despite Ryn portraying GexCrypto as a world-class trading platform with superior service and technology, the platform was never built and was never operational. The complaint further alleges that Ryn’s promises to investors of guaranteed returns from the crypto asset mining business, a minimum of $10,000 per month, were also false. In reality, Ryn never paid any returns, and investors lost all of their contributions.
The SEC’s complaint charges Ryn and GexCrypto with violating the registration provisions of Sections 5(a) and (c) of the Securities Act of 1933, as well as the antifraud provisions of Section 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Without admitting or denying the allegations in the SEC’s complaint, Ryn and GexCrypto each consented to final judgments permanently enjoining them from violating the charged provisions and ordering them to pay, on a joint-and-several basis, disgorgement of $825,994.37, prejudgment interest of $187,567.87, and a civil money penalty of $1,000,000. The final judgment against Ryn also prevents Ryn from serving as an officer or director of a public company and from participating in the issuance, purchase, offer, or sale of any security with the exception of Ryn purchasing or selling securities for his own personal accounts. The settlement is subject to court approval.
The SEC’s Office of Investor Education and Advocacy and the Division of Enforcement’s Retail Strategy Task Force have issued an Investor Alert with tips on how investors should avoid investment decisions based solely on common ties with someone recommending or selling the investment.
The SEC’s investigation was led by Adrienne Adkins, Rebecca Schendel Norris, and Jonathan Shapiro and supervised by Amy Friedman and Carolyn Welshhans, with the litigation led by James Carlson. The SEC appreciates the assistance of the U.S. Attorney’s Office for the Southern District of New York and the New York Division of the U.S. Postal Inspection Service.