GemCoin Founder Sentenced to Ten Years for Crypto Fraud
On Jan. 11, a California court sentenced Steve Chen, the founder of Gemcoin, for defrauding tens of thousands of investors.
Chen was responsible for defrauding 70,000 investors through the GemCoin scheme that promised high returns. It was among the earliest cryptocurrency scheme that managed to collect over $147 million from investors. At the time, Chen, also known as “Li Chen” and “Boss,” ran U.S. Fine Investment Arts (USFIA). He marketed GemCoin stating the project was backed by gems mined by the company. He also explained that the currencies could be traded on the USFIA platform. Chen managed to run the scheme for two years, from 2013 to 2015.
The FBI Assistant Director explained:
“Mr. Chen lured victim investors around the globe by creating a mirage made of fashionable cryptocurrency features and dynamic marketing tactics.”
Last year in June, Chen pleaded guilty to conspiracy to commit wire fraud and one count to tax evasion. In addition, Chen faced Civil charges with the Securities and Exchange Commission (SEC) in 2017 in a $ 471 million lawsuit against him.
While the court has finished with the sentencing process, the California court scheduled a restitution hearing in July to discuss compensation to the fraudulent scheme’s victims.
Gemini to Offer Credit Card with Crypto
Gemini, a crypto exchange and custodian, announced on Thursday 14 that it would launch the Gemini credit card. As per the announcement, the new card is a crypto credit card with cryptocurrency rewards.
The credit card will work similarly to traditional credit cards, but users will earn up to 3% in Bitcoin on their purchases. The rewards will be deposited in customers’ Gemini accounts. The card will be available to U.S. customers.
The launch has reportedly been accelerated by Gemini’s recent acquisition of the fintech startup Blockrize. So far, Gemini has opened the Gemini Credit Card waitlist, which gives its current customers and those on the Blockrize waitlist.
While commenting on the launch, Tyler Winklevoss, CEO of Gemini, explained:
“The Gemini Credit Card will make it easier for any consumer to invest in bitcoin and other cryptos without changing their existing behavior.”
He explained that he hopes this new project will help drive crypto to the mainstream. He also added “rather than deciding how and when to buy crypto, customers can do so when making their everyday purchases. We’re excited to welcome the Blockrize team to Gemini and work together to continue to mainstream crypto.”
A Real Estate in German Issued a $24 Million Bond Using Stellar Blockchain
Vonovia, a real estate group in Germany, recently used the Stellar blockchain to issue a $24 million bond. As per the announcement, Vonovia used the Stellar Blockchain to issue security tokens with transferring real estate rights. The company used an online platform called FirstWire to issue the tokens.
Helene von Roeder, the chief financial officer at Vonovia, said that the blockchain-powered bond digitization would enable the company to finance themselves “faster, easier and cheaper.” Each bond reportedly has a full term of three years. Roeder further explained that:
“Issues are transparent and traceable in real-time, which guarantees a professional transaction standard. It also allows us to reach new investors globally.”
The U.S. Office of the Controller of the Currency (OCC) recently granted Anchorage to launch the first-ever federally chartered digital asset bank. It was given the national trust banking charter, which allows it to create Anchorage Digital Bank.
Nathan McCauley and Diogo Mónica, founders of Anchorage, explained:
“Having a national bank charter places Anchorage Digital Bank firmly on the same regulatory footing as other national banks in the country. Since our founding, we’ve been credited numerous times with blurring the lines between crypto and traditional finance. Today, we’re happy to see those lines begin to be erased.”
Anchorage became the first cryptocurrency operator to receive the federal charter. This is one of the many steps into a better digital future for the banking industry. U.S. Treasury Department explained that:
“By bringing this applicant into the federal banking system, the bank and industry will benefit from the OCC’s extensive supervisory experience and expertise.”
Acting OCC chief Brian Brooks further added that he believed banks and other financial institutions would more broadly transition to blockchain. Brooks added that he hopes the industry could create crypto banks that are “able to hold stablecoins that reflect the value of a fiat currency, but that doesn’t change the native asset.”