The US Securities and Exchange Commission (SEC) has ceased a US$32 million cryptocurrency investment scam created by Steve Chen, who misled hundreds of investors to raise millions of dollars, by claiming that the investment firm US Fine Investment Arts, Inc. (USFIA) was a subsidiary of US China Consultation Association, a joint venture between the United States and Chinese governments.
The USFIA (Jason Chen) guaranteed its investors a 64x payout in Gemcoins, in exchange for their investment in the company. Chen personally claimed that USFIA owned large amber mines in the Dominican Republic and Argentina, and that USFIA was set to undergo an initial public offering in the near future.
Foreign investors took interest in the IPO of USFIA and Chen’s claims that all investors would be entitled to receive pre-IPO shares in USFIA that would increase in value once the company becomes listed on the public stock market.
Investors were promised a highly profitable payout in Gemcoin, a cryptocurrency created by USFIA as part of the scheme. On its website, USFIA stated that Gemcoin is backed by US$50 billion in assets and has partnered with ApplePay to roll out 2,500 ATMs throughout the United States.
“Gemcoin's value is backed by parent company AFG’s 10 Precious Gem mines and Gemcoin are stable as it is backed by its equivalent in precious stones. USFIA has agreements with ApplePay - 2,500 ATM's ready for nationwide distribution for use with our Global VISA Debit Card and joining a ATM network along side Bitcoin,” announced USFIA.
Furthermore, Chen and others from USFIA hosted multiple presentations and talks to convince its investors that the company:
- Plans to open 3,000 coffee shops in the next three years;
- Owned 70% of the amber mines in the Dominican Republic;
- founded China Unicorn, an undersecretary to the Secretary of States of the People’s Republic of China;
- would increase exponentially every two months in value.
The US$32 million raised from the Gemcoin scam was almost immediately wired to Chen’s personal accounts in China, which are now frozen due to the complaints of the US SEC. However, the SEC claims that the majority of the funds were already used to purchase luxurious goods such as sports cars, apartments and other properties.