The US Securities and Exchange Commission (SEC) has charged Donald Blakstad of running a fraudulent crypto mining scheme.

According to the official filing, SEC has accused the San Diego investment fund owner of defrauding $3.5 million from investors, in three separate firms he owned. The commission also accused Blakstad of deploring elaborate tactics to entice at least 14 victims promising them of large returns on their investment.

The SEC further alleged that, the crypto mining operation headed by Blackstad took in some $550,000 from five separate investors. Blackstad told them that their capital will be used to purchase equipment.

However, the SEC alleged that Blackstad used half of those funds on himself in restaurants, casinos and hotels. They also accused him of making payments to individuals who linked him to investors.

In July 2019, Blackstad was arrested and charged for running an insider-trading ring that made more than $6 million from illegal tips about Illumina Inc. He was charged with five counts of conspiracy, wire fraud, as well as securities fraud. Blackstad was alleged to have passed the tips from Bustos to others for their benefit and to help him avoid detection.

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