Man behind GemCoin, a fake cryptocurrency, settles lawsuit for $71 … – Ars Technica

USFIA

In the eight-page final judgment, which was issued on Monday, Chen agreed to no longer participate in any similar financial dealings. In addition, he and his former companies willhave to pay back over $51.2 million in ill-gotten gains, plus $3.79 million in interest, and a $16.7 million penalty as a result. Some of that money will be repaid by liquidating his companies assets, including multiple pieces of real estate. A recent report by the court-appointed receiver found records showing that approximately 65,000 unique e-mail addresses of investors had been affected. But even more people may have been put at risk.

Neither SEC attorneys nor lawyers representing Chen immediately responded to Ars request for comment.

As Ars reported two months ago, US District Judge Robert G. Klausner ruled that Chens Gemcoin operation was fraudulent.

Gemcoin advertised itself in ridiculous promotional videos (see above) as a purported cryptocurrency that was "trusted," as it was "backed" by amber mines. The offices of Gemcoins parent company, Alliance Finance Group, and its subsidiary, United States Fine Investment Arts, were raided in October 2015 by federal and local authorities.

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.

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Man behind GemCoin, a fake cryptocurrency, settles lawsuit for $71 ... - Ars Technica