SEC v. John Barksdale; and JonAtina Barksdale, No. LR-25341, Southern District of New York (Mar. 8, 2022) — Press Release

SEC Charges Siblings in $124 Million Crypto Fraud Operation That Included Misleading Roadshows, Youtube Videos Litigation Release No. 25341 / March 8, 2022 Securities and Exchange Commission v. John Barksdale, JonAtina Barksdale, 1:22-cv-01933 (S.D.N.Y filed March 8, 2022) The Securities and Exchange Commission today charged siblings John and JonAtina (Tina) Barksdale with defrauding thousands of retail investors out of more than $124 million through two unregistered fraudulent offerings of securities involving a digital token called "Ormeus Coin." According to the SEC's complaint, from June 2017 through the present, the Barksdales offered and sold Ormeus Coin to investors on crypto trading platforms. In addition, from June 2017 to April 2018, through a multi-level marketing business called Ormeus Global, the Barksdales offered and sold subscription packages that included Ormeus Coin and an investment in a crypto trading program. As alleged, to promote the offerings, John Barksdale held roadshows around the world while he and his sister, Tina, led the production of social media posts, YouTube videos, press releases, and other promotional materials. The complaint alleges that at the events, in the produced materials, and currently on Ormeus Coin's website, the defendants falsely claimed that Ormeus Coin was supported by one of the largest crypto mining operations in the world, even though they abandoned their mining operations in 2019 after generating less than $3 million in total mining revenue. As alleged, in many of these investor communications, the defendants falsely stated that Ormeus Coin had a $250 million crypto mining operation and was producing $5.4 million to $8 million per month in mining revenues. According to the complaint, to preserve the fiction that Ormeus Coin was successfully mining crypto, the Barksdales arranged for a public website to display a wallet of an unrelated third party showing more than $190 million in assets as of November 2021, even though the Ormeus wallets were worth less than $500,000. The complaint also alleges that the Barksdales manipulated Ormeus Coin's price and misused millions of dollars of investor funds for personal expenses. The SEC's complaint charges the Barksdales with violating the registration provisions of Section 5(a) and 5(c) of the Securities Act of 1933 ("Securities Act") and the antifraud provisions of Section 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC seeks injunctive relief, disgorgement plus prejudgment interest, and civil penalties from the defendants. In a parallel action, the U.S. Attorney's Office for the Southern District of New York unsealed criminal charges against John Barksdale. The SEC's investigation was conducted by Matthew B. Reisig under the supervision of Timothy England and Melissa Hodgman. Melissa Armstrong and Fred Block will lead the litigation. The SEC's Office of Investor Education and Advocacy cautions investors to be wary of potential crypto investment scams and of investing based on social media. SEC Complaint

SEC Charges Siblings in $124 Million Crypto Fraud Operation That Included Misleading Roadshows, Youtube Videos Litigation Release No. 25341 / March 8, 2022 Securities and Exchange Commission v. John Barksdale, JonAtina Barksdale, 1:22-cv-01933 (S.D.N.Y filed March 8, 2022) The Securities and Exchange Commission today charged siblings John and JonAtina (Tina) Barksdale with defrauding thousands of retail investors out of more than $124 million through two unregistered fraudulent offerings of securities involving a digital token called "Ormeus Coin." According to the SEC's complaint, from June 2017 through the present, the Barksdales offered and sold Ormeus Coin to investors on crypto trading platforms. In addition, from June 2017 to April 2018, through a multi-level marketing business called Ormeus Global, the Barksdales offered and sold subscription packages that included Ormeus Coin and an investment in a crypto trading program. As alleged, to promote the offerings, John Barksdale held roadshows around the world while he and his sister, Tina, led the production of social media posts, YouTube videos, press releases, and other promotional materials. The complaint alleges that at the events, in the produced materials, and currently on Ormeus Coin's website, the defendants falsely claimed that Ormeus Coin was supported by one of the largest crypto mining operations in the world, even though they abandoned their mining operations in 2019 after generating less than $3 million in total mining revenue. As alleged, in many of these investor communications, the defendants falsely stated that Ormeus Coin had a $250 million crypto mining operation and was producing $5.4 million to $8 million per month in mining revenues. According to the complaint, to preserve the fiction that Ormeus Coin was successfully mining crypto, the Barksdales arranged for a public website to display a wallet of an unrelated third party showing more than $190 million in assets as of November 2021, even though the Ormeus wallets were worth less than $500,000. The complaint also alleges that the Barksdales manipulated Ormeus Coin's price and misused millions of dollars of investor funds for personal expenses. The SEC's complaint charges the Barksdales with violating the registration provisions of Section 5(a) and 5(c) of the Securities Act of 1933 ("Securities Act") and the antifraud provisions of Section 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC seeks injunctive relief, disgorgement plus prejudgment interest, and civil penalties from the defendants. In a parallel action, the U.S. Attorney's Office for the Southern District of New York unsealed criminal charges against John Barksdale. The SEC's investigation was conducted by Matthew B. Reisig under the supervision of Timothy England and Melissa Hodgman. Melissa Armstrong and Fred Block will lead the litigation. The SEC's Office of Investor Education and Advocacy cautions investors to be wary of potential crypto investment scams and of investing based on social media. SEC Complaint