Business

Steve Kaaru

Colorado crypto broker scammed $1.5 million, banned by U.S. regulators

A U.S regulatory body has banned a crypto broker for his involvement in a $1.5 million crypto scandal. The Financial Industry Regulatory Authority (FINRA) blacklisted the trader in its latest monthly list of disciplinary actions. The self-regulatory organization also banned several other brokers who it accused of fraud and unethical behavior.

FINRA accused Daniel Todd Levine of several cases of misconduct, the first of which was executing unauthorized trades. Levine, a resident of Englewood, Colorado reportedly used his clients’ money without their knowledge or consent.

In its report, FINRA revealed that Levine had conducted the scam with his brother. The brother lives in Europe and has been a fugitive from U.S law enforcement agencies for the past 14 years.

Levine convinced his clients that his brother could get them Bitcoin Core (BTC) at discounts of up to 90 percent. He was reportedly buying the BTC from private sellers in Europe. Levine promised his clients incredible returns from the venture.

The clients believed Levine and invested their money in the project. According to FINRA’s report, they wired over $1.5 million to his brother. Levine expected to make at least $2 million in commissions, state documents show.

At the time of the incident, Levine was working with New York-based investment bank, Morgan Stanley. When the bank got wind of his indiscretions, he resigned to allow time for the investigations. He then got another job at First Financial Equity, a wealth management company. However, he failed to disclose that he was under investigations as required by the company’s regulations. When the company found out, it fired him.

Levine has begun paying some of the money he lost his clients, but the exact amount is unknown. He has also reportedly signed a consent order that bars him from serving in Colorado’s securities industry. FINRA has also not established whether Levine got scammed by his brother as well, or if they were working together.

FINRA had laid off the crypto industry during its 2017 skyrocketing phase. However, in September last year, it filed its first crypto related case. The case was against Timothy Ayre whom it accused of securities fraud. Timothy, a resident of Massachusetts was behind HempCoin, a crypto token that FINRA classified as a security.

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