SEC Halts Argyle Coin ICO For Being Alleged Ponzi Scheme

The US Securities and Exchange Commission (SEC) has halted a fast-moving initial coin offering (ICO) that was seeking to raise up to $30 from 300 investors ‎to develop a Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Read this Term-based platform for financing, trading and paying for precious diamonds.

The SEC’s Cyber Unit today obtained an emergency asset freeze against South Florida-based Argyle Coin and filed charges against its principal Jose Angel Aman. The agency called the project as an outright securities fraud that doesn’t differ from a typical pyramid or Ponzi Scheme Ponzi Scheme A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and Read this Term.

Self-proclaimed diamond industry veteran Jose Arman founded argyle Coin with the goal of building an e-commerce platform powered by cryptocurrency for the precious metal industry.

Argyle Coin promoted their offering as the world’s first cryptocurrency to correlate their tokens with real diamonds that worth over $25,000,000. It also claims to create a new class of ICOs that will guarantee the performance of its blockchain platform.

Further, the investors were assured their investment was risk-free. With millions in diamonds in a safe deposit box, their investment was protected if the global diamond market went south, said Aman, explaining why their investment was secure.

Criminal Background of ‎Executives

The scheme was far bigger than the ICO plans alleged in the SEC’s filing against the diamond dealers. Specifically, the agency alleges that Argyle Coin was a continuation of a fraud scheme that Aman orchestrated with two other companies he owned a few years ago.

Back in 2014, Aman’s diamond investment companies - Natural Diamonds Investment Co. (Natural Diamonds) and Eagle Financial Diamond Group Inc (Eagle)- operated from offices on Worth Avenue in Palm Beach and illegally raked in roughly $25 million from at least 100 investors.

It further explains “Aman engaged in unregistered offerings of securities in Natural Diamonds and Eagle as early as May 2014, falsely promising 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.”

Argyle Coin is yet another case to be brought by the SEC’s new cyber unit, which was created in 2018 to target violations involving distributed ledger technology and initial coin offerings as part of a new effort to fight cyber-crime.