In a new report, the court-appointed receiver assigned to investigate an alleged cryptocurrency scam has found no evidence of "any legitimate Gemcoin or other viable business."

In October 2015, the Securities and Exchange Commission announced that it had sued a Southern California company over an alleged Ponzi scheme resulting in a loss to investors of at least $32 million. If the government’s accusations are correct, that would make Gemcoin one of the largest digital-currency-based financial schemes ever.

The lawsuit came days after the United States Marshals Service and the Arcadia Police Department froze assets and raided corporate offices in Arcadia, north of downtown Los Angeles. Alliance Finance Group and its assets were promptly put into the hands of a court-appointed receiver, whose job it remains to examine what went wrong.

Numerous online promotional videos in many languages claim that Gemcoin’s parent company Alliance Finance Group and subsidiary United States Fine Investment Arts (USFIA) controlled $50 billion in amber mine assets in Latin America. The companies touted the fact that because Gemcoin was "backed" by these amber mines, this cryptocurrency had inherent value.

According to the February 2016 report, the receiver, Thomas A. Seaman, located over $21 million in gross receipts through the end of 2015. He wrote:

At this point, due to the volume of electronic data and disorganized manner in which it was kept by the Receivership Entities, the Receiver has not yet been able to identify the entire scope of the USFIA enterprise, the number of investors, or specific amounts invested by investors and distributed to them. The Receiver's work to analyze and better understand the investor data, with the assistance of his forensic computer specialist, is ongoing. … Aside from some income generated by the hotel and rental properties, the Receivership Entities had no significant source of income other than money raised from investors. The Receiver has verified that virtually none of the assets described in online and written marketing materials actually exist. Instead of mines located around the world, millions of dollars in precious gems, and houses and cars available to be awarded to investors, the Receiver has found only costume jewelry, boxes of rocks, and bins filled with tens of thousands of little rings of nominal value.

Steve Chen and the companies associated with Gemcoin also face a proposed class-action lawsuit on behalf of alleged victims filed in state court in Los Angeles.

The lawyer who brought the state case, Long Liu, did not immediately respond to Ars’ request for comment.

"Before it was just speculation, but now we have concrete evidence to show where the money went and how it was transferred," Liu told the Pasadena Star-News this week. "All of these companies were set up to defraud investors and to hide the money."