A U.S. citizen disguised as a cryptocurrency advisor has been convicted of embezzling cryptocurrency and cash fraudulently obtained from investors.

The U.S. Department of Justice (DoJ) announced Tuesday that San Francisco resident Jerry Ji Guo will be spending six months behind bars paying $ 4.4 million in restitution for his activities.

The 33-year-old former journalist admitted having transformed himself into an expert and advisor on cryptocurrency and initial coin offerings (ICOs).

ICOs are investor events that were originally founded to provide up-and-coming projects with an alternative method of financing to angel investments or loans. Participants in legitimate ICOs receive tokens with a project brand for their contribution. If the project is successful, investors could generate significant returns. However, ICOs are risky and have paved the way for exit scams and fraud.

In Guo’s case, he deceived investors by promising to provide “advisory, marketing and advertising services,” according to the US attorney’s office. Instead of delivering on its promise, investors’ cash and cryptocurrency – including Bitcoin (BTC) and Ethereum (ETH) – have been withdrawn from the wallets that companies use to deposit funds in advance to secure its “services”.

Investor cryptocurrencies have appreciated in value over the past few years, and the combined funds with cash are now valued at an estimated $ 20 million.

A federal grand jury sued Guo in 2018, and he pleaded guilty a year later. Seven other wire fraud cases were dismissed. At the time of the charge, Guo had been behind bars for up to 20 years.

In addition to serving the sentence and making amends, Guo must also undergo a three-year custody release.

The DoJ’s Money Laundering and Asset Restoration Department received arrest warrants in February 2020 to seize the stolen funds, saying the government “is [now] able to return the stolen property to the victims. ”

Earlier this month, US prosecutors sentenced former RG Coins owner Rossen Iossifov to 10 years in prison after he was found guilty of laundering funds from online auction fraud through his cryptocurrency exchange.

The DoJ and FBI are constantly on the hunt for perpetrators of cryptocurrency fraud and schemes, and now the SEC keeps a list of fiat investment and crypto firms consumers should be wary of.

In January, the SEC added eight more cryptocurrency organizations to its watchlist, announcing everything from unrealistic returns to ICO legal protection to risk-free cryptocurrency trading.

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