An English businessman, Renwick Haddow has been charged by the United States Securities and Exchange Commission for securities fraud. According to reports, Haddow was promoting a fraudulent cryptocurrency trading platform, causing losses to unsuspecting investors.

Haddow, who has been living in the New York is said to have been running two businesses, Bitcoin Store — a cryptocurrency investment platform and a flexible workspace firm called Bar Works. During the course of their operations, he diverted the investments received by these businesses into overseas accounts created in Mauritius and Morocco.

A leading English daily quoted the director of the SEC’s New York Office, Andrew Calamari saying,

“Haddow created two trendy companies and misled investors into believing that highly qualified executives were leading them to profitability… In reality, Haddow controlled the companies from behind the scenes, and they were far from profitable.”

Haddow, for a while successfully managed to cheat people of as much as $5 million. He came under the scanner after about 27 Chinese investors filed a complaint after they failed to get back their $3 million investment in Bar Works. They suspected Haddow of running a Ponzi scheme.

During the course of an investigation, the SEC found discrepancies in the accounts, where the inflow of funds into Bitcoin Store’s account was only $250,000 in 2015, which was way less that what investors had put in. More complaints followed the initial complaint, and eventually, it was discovered the company was selling leases and subleases functioning as investment notes instead of providing workspaces in old bars and restaurants as advertised.

The SEC claims that it has been unable to find records of any operations ever conducted by the Bitcoin Store, even though there have been millions in gross sales until now. While the SEC put an end to the Bitcoin Store’s operations, there are many similar fraudulent schemes out there that keep popping up. It is advisable for investors to conduct sufficient due diligence before making any significant investment.

Ref: The Guardian | Image: NewsBTC