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A U.S. court has hit pause on a case brought against two blockchain entrepreneurs who allegedly defrauded over $30 million from investors. The court cited a parallel criminal case against the two while making its ruling.

The New Jersey court stayed the case against Boaz Manor and Edith Pardo upon request from the U.S. government. In his ruling, Judge Stanley Chesler stated that the civil charges brought by the U.S. Securities and Exchange Commission (SEC) could interfere with an ongoing criminal suit against the two. The two defendants can seek to lift the stay if circumstances change, Judge Chesler stated.

The SEC has been pursuing the two defendants for several months now for allegedly duping investors in a $30 million ICO. Manor and Pardo were founders of CG Blockchain and BCT Inc., two companies that claimed to develop blockchain-powered tools for hedge funds. Their flagship product was Blockchain Terminal, a tool that would enable hedge funds to record their transactions on the blockchain.

The two lied to investors that they had recruited several hedge funds which were willing to pay for the product, according to the regulator.

Moreover, the 46-year-old Manor withheld crucial information from the investors. The most critical was the fact that he had been convicted in Canada for fraud amounting to $106 million. He spent four years behind bars for securities fraud. He had also been banned from serving in any position in the securities industry.

Manor allegedly teamed up with Pardo, a 68-year-old Michigan resident to organize a $30 million ICO for CG Blockchain. To hide his tainted identity, he dyed his hair, grew a beard and took up a new name—Shaun MacDonald. Meanwhile, Pardo posed as a wealthy investor who believed in the potential of the firm.

The SEC charged the two with conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison. The Department of Justice also filed a lawsuit against the two, charging them with wire and securities fraud, a crime which carries yet another 20 years in prison and a $5 million fine.

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