Retail investors lost $3.6 million from two cryptocurrency fraudulent schemes purportedly perpetrated by Ryan Ginster of California. From 2018 to 2021, Ginster sold unregistered securities offerings on two online platforms, www.MyMicroProfits.com and https://socialprofimatic.com. SEC Press Release.
Ginster’s companies were allegedly running high yield investment programs (HYIP). An HYIP is typically an unregistered financial investment scheme promising high rates of return with minimal risk. Not surprisingly, an HYIP is often a fraudulent financial investment. During a two-month period in 2018, one company, Social Profimatic, raised almost $845,000 in a program promising an 8% return per day by fulfilling social media marketing orders. Over a ten-month period of time, My Micro Profits raised $2.8 million by promising to return 3.12%/day. The company claimed to invest in “opportunities such as ‘transaction processing fees, cloud hosting, cryptocurrency trading, and advertising arbitrage.’”.
Gibberish or an Actual Business?
Are you wondering what a social media marketing order is or what advertising arbitrage is? Don’t worry. That is part of the scam. Making the business sound more official and complicated than it is, attracts a certain type of investor. In Ginster’s case, both companies were going to aggregate investors’ money in order to have enough capital to conduct business. However, neither company actually conducted any underlying business. The business appeared to be to get investors’ money for personal gain. At least that is what the SEC claims.
Cryptocurrency Irregularities
Perhaps investors were persuaded that this cryptocurrency scheme was legitimate, as they could invest through a website using other digital coins, including Bitcoin. But investing with a well-known digital currency like Bitcoin didn’t make these investments any safer.
Where’s the Money?
Ginster never used investors’ money to try to turn a profit. Instead, he was busy taking money for himself. Ginster took around one million dollars of investors’ money for his personal use, including making tax payments, mortgage payments, purchasing a Mercedes Benz, and paying off almost $200,000 in credit card bills. *
What Made Investors Suspicious?
After all, they were getting up-to-date information with their purported profits. In other words, investors were sent fraudulent statements. Two things happened to start unraveling this investment fraud. First, a few investors tried to withdraw money unsuccessfully. Even after contacting the company through the website, they were not able to get their money back. And, second, the website that was the only link between the company and the investor, disappeared off the internet. Another investor was able to get some of his investment returned, but shortly thereafter, the website stopped functioning so he could not get the remainder of his money.
Investors, Do Your Homework
Had anyone performed a few minutes of research, they would have found several suspicious items, including:
- Neither company was registered with the SEC, nor were they legal entities.
- Ginster was not registered with the state securities commission or the SEC. He also did not hold any securities licenses.
- Neither investment opportunity was registered with the state or federal SEC.
- Ginster used an alias, Ryan Oakley, for his second venture.
When exploring financial investment opportunities in securities, oil and gas, real estate, or cryptocurrency, do your research. Check the history of the people in the deal, as well as any past or pending lawsuits. Read all documents before signing. Remember that doing business online comes with inherent risks.
We hope all your real estate, cryptocurrency, and oil and gas investments are safe and profitable. But if you find yourself searching for an experienced oil and gas litigation lawyer or a commercial litigation lawyer, we are here to help.
Mark A. Alexander, P.C. (“the Firm”) has represented more than 140 people during the last 12 years who have been defrauded of their hard-earned money by unscrupulous companies.
Cryptocurrency Fraud Attorney
In their aggressive pursuit of justice, the Firm has obtained substantial judgments and settlements for clients, and importantly have worked to collect money for our clients. Some of the Firm’s clients have been doctors, lawyers, bankers, accountants, and retired NFL players.