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SEC Obtains Court Order To Halt Diamond-Linked Crypto Ponzi Scheme

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The U.S. Securities and Exchange Commission or SEC announced that it has taken action to halt an ongoing $30 million diamond-linked cryptocurrency Ponzi scheme targeting hundreds of investors in the U.S. and Canada.

The SEC sought permission from the U.S. District Court for the Southern District of Florida to take action against South Florida-based cryptocurrency business firm Argyle Coin LLC, and its promoter Jose Angel Aman for using investor funds to run a Ponzi scheme.

Judge Robin L. Rosenberg granted the SEC's request for a temporary restraining order and asset freeze against Aman, Argyle Coin and two other companies charged by the SEC as relief defendants.

The court also appointed Jeffrey D. Schneider as a Receiver over Argyle Coin.

According to the SEC complaint, Aman is said to have cheated more than 300 investors since May 2014 by selling unregistered securities in two other firms he owns: Natural Diamonds Investment Co. (Natural Diamonds) and Eagle Financial Diamond Group Inc.

SEC said he falsely promised investors that the companies would invest in whole diamonds to cut down and sell for huge profits. Aman was assisted by Harold Seigel and Jonathan H. Seigel, who also have interests in Natural Diamonds and Eagle.

SEC said in a press release that Aman and Jonathan Seigel lured investors to invest in Argyle Coin, falsely claiming that it was risk-free because it was backed by fancy colored diamonds, and promising to use investor funds to develop the cryptocurrency business.

Instead, according to the complaint, Aman, Natural Diamonds, Eagle, and Argyle Coin misused more than $10 million of investor funds to pay other investors their purported returns and for Aman's personal expenses, including rent on his home and purchases of horses.

Eric I. Bustillo, Director of the SEC's Miami Regional Office, said Aman operated "a complicated web of fraudulent companies in an effort to continually loot retail investors and perpetuate the Ponzi schemes as well as divert money to himself."

The SEC's complaint charges Natural Diamonds, Eagle, Argyle Coin, Aman, Harold Seigel and Jonathan Seigel with violations of the securities registration provisions and the anti-fraud provisions of the federal securities laws.

The SEC's investigation was conducted in the Miami office led by Linda S. Schmidt.

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