Washington – Two siblings have been accused of a massive $124 million crypto fraud after they lured thousands of crypto investors into investing unregistered securities that involved a digital token, reported federal regulators.

“A pair of siblings made false statements about a cryptocurrency and defrauded thousands of mom-and-pop investors out of more than $124 million, according to a federal regulator“, Bloomberg Tweeted.

The civil lawsuit filed on Tuesday against the siblings alleges that “John and JonAtina Barksdale used in-person roadshows around the world and social media including YouTube videos to sell fraudulent investments related to the so-called Ormeus Coin.”

According to SEC, the siblings claimed that the cryptocurrency was backed by the world’s largest crypto mining operations – following making almost $3M in mining revenue and leaving their crypto mining operations in 2019.

The SEC lawsuit filed in a court in Manhattan, USA, indicted the siblings for “violating federal securities laws,” and that it “seeks unspecified civil penalties and restitution”.

Moreover, on Tuesday, Manhattan’s federal prosecutors announced that “John Barksdale has been arrested and charged with criminal securities fraud”.

It is not confirmed whether the siblings have appointed attorneys to represent them in court yet.

In a statement, SEC addressed the investors to be vigilant about potential scams and be wary of investing in securities based on social networking groups.

Last year, chairman Gary Gensler of SEC said investors need more protection in the crypto market that, according to him, is “rife with fraud, scams and abuse.”

Popular digital currencies like Bitcoin ETF have been left unregulated by major governmental bodies. The SEC has won several fraud cases against crypto promoters, however, the agency needs greater authority from Congress, and more resources, to regulate the crypto markets, said Gensler.

The Biden administration has requested Congress to introduce a law to ‘expand government regulations of stablecoins’, pegged to a certain value, typically the dollar, gold or another currency.