A Southern California city council member resigned from his position Tuesday evening after being named as a defendant in a new lawsuit involving a Bitcoin-like cryptocurrency known as Gemcoin.

Last week, the Securities and Exchange Commission announced that it had sued an Arcadia-based 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.

John Wuo, who had served on the Arcadia City Council for 12 years—including three terms as mayor—told his colleagues that he was stepping down due to "health and personal reasons," according to the Los Angeles Daily News.

The former council member has appeared at numerous Gemcoin events and spoke to local Chinese-language media earlier in the year, calling Gemcoin a "breakthrough in finance."

Numerous online promotional videos in many languages claim that Gemcoin’s parent company, Alliance Finance Group (AFG), and its subsidiary, United States Fine Investment Arts (USFIA), controlled $50 billion in amber mine assets in Latin America.

However, on September 10—the same day that a number of local Arcadia residents and Gemcoin investors filed reports with police—Wuo told the Los Angeles Times that he didn’t have "any association" with Gemcoin.

The lawsuit, brought by one anonymous former Gemcoin investor, offers numerous allegations against Wuo, Gemcoin’s creator Steven Chen, AFG, USFIA, and other entities:

Defendant USFIA was and is, for all intents and purposes, a Ponzi and pyramid scheme. It promised its sales agents compensation based on money collected from recruits, and from the recruits of recruits. and so on. The individual Defendants directed USFIA and used USFIA as a cash cow to funnel money between the various Defendant Entities, themselves and their close associates. Defendants themselves, and through their entities and agents, sold worthless assets they called Gemcoins, which were purportedly backed by their own amber mines in the Dominican Republic. Defendants heralded Gemcoin as a new cryptocurrency they invented that would be revolutionary and grow exponentially in value, and that Plaintiffs could become early investors. In reality, there never was any and Defendants used their false cryptocurrency and false legitimacy of USFIA to defraud the public.

Wuo has not responded to Ars' requests for comment.