Jeremy McCalpin and Zachary Matar sentenced for roles in crypto scam

Two men from Orange County Sentenced to prison For their roles in a crypto scam they may have defrauded investors of nearly $2 million. Jeremy David McAlpine, 26, of Fountain Valley, California, and Zachary Michael Matar, 29, of Huntington Beach, Calif., were sentenced on Monday, August 1.

Jeremy McCalpin and Zachary Matar sentenced to prison

The first was sentenced to three years in prison, while the second will spend two years and six months behind bars. The US Attorney’s Office has previously charged both of them with securities fraud.

Both men are believed to have convinced hundreds, if not thousands of potential customers to purchase a new crypto token called DROP. The couple claimed to be using a new automated trading robot they called “Dex” and said that it would give buyers exclusive access to a profitable trading software that would provide high level returns for all participants.

Unfortunately, the plaintiffs say that the funds provided by the investors to the two men were not used to invest in cryptocurrencies of any kind. Instead, the money was spent in payments to themselves and their partners in their trading company. The scheme was done through a company called Dropil. Based in Belize, Central America, McAlpine and Matar managed the project from their office in Fountain Valley.

While the company appears to be a standard crypto investment platform at the time of writing, neither the men nor the company itself are registered with the Securities and Exchange Commission (SEC) as brokers or dealers according to federal prosecutors. This is required according to US financial regulations.

In addition, investors were told that the only way they could gain access to the trading bot was by purchasing DROP tokens. Both men claimed that the bot was an “expertly managed portfolio balancing algorithm”, however it appears that the product wasn’t nearly as profitable as the men claimed.

A summary of the defense ruling stated the following regarding the perpetrators:

They were young entrepreneurs, eager to be part of a new wave of crypto technology, who failed to understand the legal requirements that apply to their digital assets or the consequences of not complying with those requirements.

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According to prosecutors, both Matar and McAlpine have shown intense remorse for their actions. They admitted the financial damage they had caused to their clients, and said they regretted their actions. They were also quick to take responsibility and accept their fates.

Crypto crime has become a serious problem in recent years due to the skyrocketing price of cryptocurrencies. One of the most recent examples came in the form of a cyber attack on crypto exchange Harmony in Northern California, which eventually saw more than $100 million in digital funds disappear overnight.

Tags: crypto scam, Jeremy McAlpine, Zachary Matar

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