The US Department of Justice (DOJ) announced Friday, June 2, that two men from Orange County, California, pleaded guilty to charges of securities fraud related to the sale of an ICO project valued at 1.8 million Dollars to plead guilty.

The DOJ is focused on the actions of Dropil Inc and its founders Jeremy McAlpine and Zachary Matar, who will be bringing their evidence in the coming weeks.

According to prosecutors, McAlpine and Matar allegedly sold DROP tokens to thousands of investors apparently intended to fund the operation of a cryptocurrency trading robot.

According to the DOJ, neither McAlpine nor Matar are registered with the US Securities and Exchange Commission (SEC). However, in order to lure investors into buying DROP, McAlpine and Matar made a number of untrue statements to investors in the ‘white paper’ published on the Dropil website and on the Twitter account in order to promote the supposed success of cryptocurrencies.

As the DOJ noted:

“The defendants also produced fake Dex earnings reports and made payments in the form of DROPs to Dex users, which gave the false impression that Dex was active and profitable. McAlpine and Matar also provided inaccurate information on trading volumes and revenues during and after the ICO, stating that Dropil had successfully raised $ 54 million from 34,000 domestic and international investors. In fact, the ICO raised less than $ 1.9 million from around 2,500 investors. “

“In total, the defendants received US $ 1,896,657 from 2,472 investors through the sale of approximately 629 million DROPs. But McAlpine and Matar did not use at least $ 1.6 million of the investors’ promised funds, they used that money for their own purposes and those of their employees, “the DOJ continued.

McAlpine and Matar previously reached a settlement with the SEC regarding a civil lawsuit filed by the United States’ securities commission in 2020.

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