Former Corrections Officer Faces SEC Action For Crypto Scam

The Securities and Exchange Commission has charged a former corrections officer from New Jersey for his role in a bizarre cryptocurrency scam.

The SEC has alleged that John A. DeSalvo allegedly solicited ICO money and specifically targeted police officers and first responders.

A Bizarre Scam

The charges were announced on the 23rd of August by the United States Securities and Exchange Commission (SEC). According to the announcement, Desalvo was allegedly able to raise an amount of $623,388 from over 220 investors by selling an unregistered token called the Blazar token between November 2021 and May 2022. Blazar told his unsuspecting investors that Blazar would be replacing traditional state pension systems for police, paramedics, and firefighters and give them staggering returns. DeSalvo allegedly told investors,

“Blazar Token is the first token or coin that is able to be purchased through payroll deduction every week. It will be taken out of one’s weekly earnings pretax similar to payment into a pension, 401k, IRA, or any other retirement savings plans.”

The Securities and Exchange Commission also alleged that DeSalvo falsely claimed that the Blazar token was registered and approved by the SEC despite never being registered with the regulatory body. He also told investors that there was an initial lock-up period for insiders. He then sold 41 billion Blazar tokens, which were worth around $50,000 at the time, when the token debuted on the PancakeSwap decentralized exchange in May 2022. While investors were barred from selling their tokens, DeSalvo was busy selling his. Just weeks after debuting on PancakeSwap, the Blazar token lost 99.9% of its value. The SEC explained,

“DeSalvo’s massive volume of sales placed downward pressure on the Blazar Token’s trading price and drained PancakeSwap of the majority of its liquidity in the investment, resulting in its collapse and substantial investor losses.”

DeSalvo Abused Position Of Trust

DeSalvo ended up misusing investor funds, sending all the money to crypto wallets owned by him. He also paid for work on a home. Regulatory authorities added that DeSalvo took advantage of his position as an officer, gaining investors’

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Author: Amara Khatri

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