The United States Securities and Exchange Commission (SEC) has initiated court proceedings against a California resident for allegedly operating a multimillion-dollar cryptocurrency pyramid scheme, according to a press release published on May 23.

The SEC alleges Daniel Pacheco of conducting a fraudulent, unregistered offering of securities through two California-based companies, IPro Solutions LLC and IPro Network LLC, from January 2017 through March 2018.

The companies purportedly attracted over $26 million from investors who received “points” that could be converted into a digital currency called PRO Currency.

Investors who contributed additional funds were told they could earn cash commissions and additional convertible points by recruiting new investors into the network. Michele Wein Layne, Director of the SEC’s Los Angeles Regional Office, said:

“We allege that Pacheco hid an old fraud under the guise of cutting-edge technology. He enticed investors by offering them the opportunity to speculate in cryptocurrency, when in fact he was simply operating a pyramid scheme.”

The SEC also alleges that Pacheco misappropriated investors’ funds when he purchased a $2.5 million home and a Rolls Royce automobile.

Earlier in May, the SEC halted a confirmed cryptocurrency Ponzi scheme after it took funds worth $30 million. The principal behind the scheme dubbed Argyle Coin, Jose Angel Aman, was accused of running a Ponzi scheme using funds he gained from investors in his alleged diamond resale outfit.

In April, Cointelegraph reported that the SEC was going to hire a dedicated staff member to provide expertise on cryptocurrency, who will serve various consulting roles. Duties will reportedly “engage with other Divisions and Offices on such matters; serve as the Division's point of contact for domestic and international regulators, market participants, and the public; provide expert level comment on policy and workstreams,” among others.