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Crypto Token Backed by $25M Diamond Ponzi Scam Flagged by DoJ

The US Department of Justice has charged a 51-year-old Florida native with wire fraud, for soliciting investors in a diamond-backed cryptocurrency Ponzi and investment scam.

Jose Angel Aman was charged and made his appearance in court last week. According to FBI investigations, the Florida native and his partners in crime targeted investors throughout the United States and Canada. Aman initially started off with a rough diamond business, touting that he had rough colored diamonds and a storage inventory worth $25 million in value. Aman also falsely promised his investors that the diamond business was a guaranteed high return investment, with no risk.

At the end of each investment cycle, Aman along with his accomplices would tout a sham called “Reinvestment Contracts” to investors, and through this ruse, the fraudsters were able to buy more time to recruit new investors and launder more money.

Diamond and Crypto Ponzi Scheme Generates $25M

All allegations were false. The scammer was alleged to have operated following a Ponzi scheme, in which he made interest payments to earlier investors with new recruits’ fiat funds. When his diamond Ponzi scheme was on the brink of collapsing, Aman turned to a new business plan and launched Argyle Coin, LLC, a cryptocurrency-based business that touted its own token, Argyle Coin.

Aman once again promised high rates of return, with no risk, and the token was said to be diamond-backed. Once again, the Florida native employed a Ponzi scheme to repay solicited investors. The total amount of his investment and crypto scams were said to have generated over $25 million.

Using only a fraction of the money received from Argyle, LLC investors to develop a cryptocurrency token, Aman employed the rest of his fraudulent profits to support “a lavish lifestyle,” pay off his accomplices and make interest payments to earlier targeted investors.

The US Securities and Exchange Commission (SEC) had moved to stop Aman’s cryptocurrency and Ponzi operation back in May. Aman is alleged to have conducted multiple operations through similar Ponzi schemes.

BitClub Crypto Ponzi Scheme

Ponzi schemes have been on the rise, with the US Department of Justice (DoJ) recently charging a Californian man for conspiracy in fraud and for his role in a cryptocurrency mining scam that generated at least $722 million.

The cryptocurrency mining scheme, BitClub Network, was a fraudulent scam that solicited money from investors in exchange for shares in purported crypto asset mining pools.

Over 101 Carat Diamond Sold for $12.2M in Crypto in Hong Kong

A 101.38-carat diamond has been sold for over $12.2M, conducted by Sotheby’s in Hong Kong recently. The transaction will be accepted in cryptocurrency payment, either in Bitcoin or Ethereum.

“The Key 10138” diamond sold by HKD 95,135,000 (around $12.2M in US dollars) in cryptocurrency to an unidentified private collector last Friday.

According to the statement released from Sotheby’s, the diamond, the second-largest pear-shaped in D- colour flawless purity, weighing 101.38 carats, categorized as Type IIa diamond, according to The Gemological Institute of America (GIA). Sotheby’s said fewer than ten 100 carat and examples ever having come to auction, only two of them pear-shaped.

This diamond is the first diamond auctioned to accept crypto as a payment method will accept payment in either Bitcoin (Bitcoin) or Ethereum (ETH), facilitated through Coinbase Commerce, one of the largest cryptocurrency exchanges worldwide.

Sotheby’s said the institution continue their commitment to innovation by accepting payment in cryptocurrency for this landmark item.

“This is a truly symbolic moment. The most ancient and the emblematic denominator of value can now, for the first time, be purchased using humanity’s newest universal currency,” Wenhao Yu, Deputy chairman of Sotheby’s jewellery in Asia, said.

Crypto Applies on Auction

Art pieces are becoming popular, and more auctions accept digitalised form transactions and virtual currencies payments recently. The world wide web (WWW) source code was auctioned as a non-fungible token (NFT) last month and sold for $5.4m. Another piece from the United States Space Force (USSF) unveiled its plans to make its foray into the NFT metaverse via a Neil Armstrong-themed digital collection.

Image source: Sotheby’s

HKEX Set to Build Digital Trading Platform this Year

The Hong Kong Exchanges and Clearing (HKEX) is set to establish a digital trading platform this year in a pilot version as part of its comprehensive strategy, the bourse announced.

In its recent announcement, the platform – Diamond – will use smart contracts and blockchain technology. It will be designed to perform a one-stop shop for data trading and custody with instant settlements, Glenda So, co-head of markets at HKEX, said.

The platform is expected to launch this year, according to CEO of HKEX Nicolas Aguzin, “We’re very excited about the opportunities in digital and the whole transformation that we’re observing around the world,” said Nicolas Aguzin.

Trading in Diamond will initially consist of ESG (environmental, social and governance-related) products, including carbon-emission related contracts and exchange-traded funds (ETFs). The platform will also look at digital assets and megatrends.

However, the HKEX – operator of Asia’s third-largest stock market – has not planned to make the trading of cryptocurrencies part of the initial stage of Diamond.

According to So’s estimation, there could be $60 trillion to $100 trillion by 2030 in the annual trading volume of digital assets.

“Digital assets today represent a total market capitalisation of about US$3 trillion. And we’ve talked about the potential of the market in terms of trading in the future, it could be up to US$100 trillion (in annual volumes) for the whole market in the next 10 years,” Aguzin said.

In other crypto-related developments in Hong Kong, Blockchain.News reported earlier this month that the Hong Kong Monetary Authority (HKMA) published a discussion paper soliciting public contributions to its proposed regulatory approach to digital currencies and stablecoins in particular. The financial regulator also offered 5 ways to the public for further development.

According to the published paper, the HKMA has acknowledged the steady growth in the market capitalization of stablecoins. They are pegged at close to $150 billion, up significantly from less than $20 billion back in January 2020.