SEC Charges Exiled Chinese Businessman Miles Guo Scam Through Crypto

Key Points:

• The SEC charged exiled Chinese businessman Miles Guo with participating in unregistered and fraudulent offers.
• Guo was detained on Wednesday on suspicion of fraud, conspiracy, and money laundering.
• Guo’s alleged promises included a $262 million fundraiser through a phony cryptocurrency ecosystem that promised an H-Coin.

Guo Wengui, an exiled Chinese businessman with links to former Donald Trump adviser Steve Bannon, was charged by the Securities and Exchange Commission (SEC) on Wednesday with directing a complicated scheme to cheat his online followers out of more than $850 million.

Prosecutors claim that Guo, also known as Ho Wan Kwok, Miles Kwok, Wengui Guo, and Brother Seven, with the assistance of his longstanding financial adviser Kin Ming Je, defrauded thousands of followers by promising exorbitant investment returns while diverting a large portion of their funds to support opulent lives for himself and his family.

GTV, Guo, and Je reportedly transferred $100 million in investor funds to a hedge fund for the sole benefit of a firm owned by Guo’s son in a private placement issue of common shares in GTV Media Group.

Moreover, Guo allegedly misappropriated investor money from two earlier offers to support his and his family’s lifestyle, including $40 million to buy and refurbish a property in New Jersey and $3.5 million to buy a Ferrari for his son.

The SEC also sued Guo and Puerto Rico, G Club Operations LLC, and Mountains of Spices LLC for failing to register these services under securities laws. Guo was solely responsible for the fourth offering, which garnered hundreds of millions of dollars from investors via a crypto asset security known as “H-Coin,” “Himalaya Coin,” or “HCN,” and a related purpose stablecoin.

Guo reportedly misrepresented H-Coin to potential investors in October 2021, erroneously saying that 20% of H-Coin’s value was backed by gold and that he would personally reimburse investors for any future losses, according to the agency.

According to Gurbir S. Grewal, Head of the SEC’s Division of Enforcement:

“In reality, Guo took advantage of the hype and allure surrounding crypto and other investments to victimize thousands and fund his and his family’s lavish lifestyle.”

Guo was detained on Wednesday morning and faces allegations of securities fraud, wire fraud, and concealment of money laundering, which may result in decades in jail.

Guo is also facing civil allegations from the Securities and Exchange Commission.

Je, who resides in London and is also known as William Je, is charged with the same 11 criminal offenses as well as obstruction.

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Harold

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