Founders of Dropil, a defunct digital assets company, Jeremy McAlpine and Zachary Matar, are convicted in a U.S Federal prison. They are reportedly involved in an ICO scam that defrauded more than 2,000 investors of approx. $1.9 Million. As per the press release published by a Central District of California Department of Justice (DOJ), the founders are found guilty of one count each of securities fraud. Matar will have to serve a sentence of two and a half years while McAlpine sentence is three-years.
Assistant United States Attorney Ranee A. Katzenstein, the DOJ’s chief of the Major Frauds Section, headed the prosecution of two partners. The prosecutors in the sentencing memorandum said the offense committed by the two was “serious and troubling.”
Moreover, it stated that a large number of victims were financially harmed. The company provided and managed investment in a digital token called DROPs and a digital asset automated trading “bot” called Dex that used DROPs as its native token.
The details of the case revealed that McAlpine and Matar founded in 2017. It operated out of Fountain valley and incorporated it in Belize. The company offered and managed investment in a crypto token dubbed DROPs and cryptoassest automated trading “bot” called Dex whose native token is DROPs.
Using false claims the founders successfully managed to attract 2000 investors to invest in their token. Fake functionality, DEX’s profitability and volume of investment in DROPs that are already being achieved, and the value of DROPs.
The SEC revealed these false claims that led to an open investigation into the company in 2020. Dropil raised about $1.9 million and claimed to raise $54 million from its 2017-2018 DROPs ICO that sold 600 Million tokens. In July 2021, the two were found to be guilty of the securities fraud charges levied by the SEC. The agency has enforced a permanent barrier preventing them from being involved in any kind of illicit activities.
Source: https://www.thecoinrepublic.com/2022/08/04/dropil-founders-sentenced-in-a-1-9-million-ico-fraud/