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“Snake Oil” Sibling Scam: SEC Slams Duo for $124M Fraud

“Snake Oil” Sibling Scam: SEC Slams Duo for $124M Fraud

On Wednesday, US authorities accused a cryptocurrency entrepreneur and his sister of defrauding ordinary investors of millions of dollars. In a statement, the US Securities and Exchange Commission claimed that John and JonAtina Barksdale used Ormeus Coin to deceive thousands of investors.

The SEC claims that the siblings promoted Ormeus on YouTube, at global roadshows, and on cryptocurrency exchanges.

Massive Crypto Fraud

The SEC alleges that John and “Tina” utilized the fictitious coin in two unregistered securities offerings, defrauding thousands of retail investors of over $124 million. They also managed Ormeus Global, a multi-level marketing initiative offering subscription packages including Ormeus from June 2017 to April 2018. Melissa Hodgman, associate director in the SEC’s Division of Enforcement, accused the Barksdales of acting as modern-day snake-oil salesmen, misrepresenting retail investors through social media, promotional websites, and in-person roadshows.

Fraudulent Investment

John allegedly misled investors about Ormeus Coin’s value and profitability in court documents filed in Manhattan. He claimed the coin was backed by a $250 million mining operation earning over $5 million monthly, per the DOJ.

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However, mining ceased in 2019, leaving investors distraught. Accusations suggest the couple fabricated wallets to disguise the lack of Ormeus mining activity.



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BTC total market cap at $804.18 billion in the daily chart | Source: TradingView.com

In November, the cryptocurrency company reportedly misled investors by claiming a valuation of over $190 million for its vault wallet. However, it purportedly utilized another website to display this value, which showed the value of a disconnected wallet.


The actual wallets used in the project were “worth less than $500,000,” according to the SEC.

The lawyers for the Barksdales could only be found after a while.

Taking Out The Bad Guys

“Regardless of the label that the product promoters affix to their offerings, we will persistently pursue individuals who sell securities in schemes designed to deceive the investing public,” stated Hodgman.

The Justice Department has arrested John, who faces charges of conspiracy, wire fraud, and securities fraud, with a potential sentence of up to 65 years in prison.

According to the SEC, Tina, 45, lived in Hong Kong, and John, 41, was a resident of Thailand. Both defendants are citizens of the United States.

SEC is becoming concerned.

The SEC has expressed scepticism regarding whether the prevalent promotional practices in the cryptocurrency sector amount to securities fraud.

Last week, emerging reports indicated that the SEC has reportedly set its sights on NFTs used for fundraising purposes, intending to treat them “like ordinary stocks.”

As of this writing, Bitcoin (BTC) on Coingecko was $42,324.87.


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