The Securities and Exchange Commission (SEC) has filed suit against Donald G. Blakstad for scamming investors partly through an allegedly fraudulent crypto mining operation.
In a filing Jan 8, the SEC alleged that Blackstad, 60, bilked over $3.5 million from investors of three separate firms: an oil and gas company; a vehicle parts holding company; and “Energy Sources International” (ESI), a purported cryptocurrency mining company whose Las Vegas datacenter has only one employee: Blakstad.
The crypto mining operation specifically took in some $550,000 from five separate investors, all of whom were told by Blakstad that their capital would cover equipment costs. However, the SEC alleges that Blakstad instead used nearly half the cash for himself, at casinos, restaurants and hotels.
The regulator further alleges Blakstad kept up the ruse by issuing each of the five investors $60,000 checks as returns on their investments.
Blakstad was previously charged last July in a separate insider trading scheme worth $6.2 million.
Disclosure Read More
The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.
