John A. DeSalvo, a former lieutenant at the New Jersey Department of Corrections, has been charged by the SEC for allegedly orchestrating a crypto scam that targeted police officers and first responders. The scheme involved soliciting ICO funds and executing a pump-and-dump strategy on PancakeSwap. Learn more about the details and consequences of this deceptive crypto endeavor.
In a recent development, John A. DeSalvo, a former lieutenant at the New Jersey Department of Corrections, is facing charges filed by the U.S. Securities and Exchange Commission (SEC) for his alleged involvement in a cryptocurrency scam specifically aimed at police officers and first responders. The orchestrated scheme, which involved soliciting funds through an Initial Coin Offering (ICO) and executing a pump and dump strategy on the PancakeSwap platform, has raised serious concerns in the cryptocurrency community.
According to the announcement made on August 23rd, DeSalvo reportedly managed to raise a staggering $623,388 from 222 investors by selling his own cryptocurrency token, named Blazar. The scam unfolded between November 2021 and May 2022, during which DeSalvo assured potential investors that Blazar would revolutionize traditional state pension systems for police, firefighters, and paramedics. He promised significant returns and even claimed that the token could be conveniently purchased through payroll deductions, akin to contributions to retirement savings plans.
Under false pretenses, DeSalvo informed investors that Blazar Token had obtained SEC registration as a securitized token, despite never actually acquiring the necessary approval from the regulatory body. Adding to the deceit, DeSalvo provided misleading information about an initial "lock-up" period for insiders while he himself sold a staggering 41 billion Blazar tokens, valued at $51,000 at the time. This mass sale occurred upon the token's debut on the decentralized exchange PancakeSwap in May 2022.
Shockingly, investors were prohibited from selling their Blazar tokens during DeSalvo's sales frenzy. As a result of his actions, the value of Blazar Token plummeted by over 99.9% within a mere two weeks following the PancakeSwap sale. The SEC has highlighted the damaging impact of DeSalvo's actions, stating that his extensive selling exerted downward pressure on the token's trading price and drained PancakeSwap of its liquidity, leading to its collapse and inflicting substantial losses on investors.
The SEC is seeking a series of punitive measures against DeSalvo, including a permanent injunction to prevent him from engaging in future security offerings. Additionally, the regulatory body aims to impose civil penalties and secure the disgorgement of profits obtained through the fraudulent scheme.
This incident sheds light on the importance of due diligence and cautious investment practices in the cryptocurrency market. The deceptive tactics employed by individuals like DeSalvo serve as a stark reminder that the digital landscape can be fraught with risks and potential pitfalls. As the case unfolds, it underscores the need for increased vigilance and regulatory oversight to ensure the integrity and credibility of the cryptocurrency ecosystem.
In conclusion, John A. DeSalvo's alleged involvement in orchestrating a crypto scam targeting police officers and first responders has brought the spotlight back onto the vital issue of investor protection within the cryptocurrency industry. The charges filed by the SEC underscore the need for stricter regulations and heightened awareness to safeguard against such fraudulent schemes in the future.
(HIYUAN SUN, CoinTelegraph, 2023)