Two crypto fraudsters have been jailed for masterminding a digital asset investment scam that saw more than 2,000 investors lose $1.9 million.
Jeremy David McAlpine and Zachary Michael Matar, of Orange County in California, were sentenced for their role in the Dropil investment scam. A DoJ statement said that McAlpine got 36 months, while Matar received a 30-month sentence after they both pleaded guilty.
In 2017, the duo created a Belize-based company under the guise of managing investments in digital assets and created DROPs, a cryptocurrency for the project.
A trading bot called “DEX” was also launched as part of Dropil’s virtual assets trading program and marketed as an algorithm that “expertly manages risks.”
Crypto trading bot promised high returns
The duo falsely claimed that DEX would bring high-yielding returns of up to 63% for investors, while DROPs would see a spike in values, according to the white paper.
McAlpine and Matar began selling DROPs on Dropsil’s website in 2017 with an initial coin offering (ICO) launched in 2018.
Selling the securities without being registered with the Securities and Exchange Commission (SEC) was only the start of their crimes, as the duo went on to commit more infractions.
By 2019, the SEC was hot on the trail of McAlpine and Matar. Several investigative subpoenas were sent by the Commission to the team, however, both defendants misrepresented the figures to give the impression that they were operational.
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