John A. DeSalvo, a former lieutenant in the New Jersey Department of Corrections, has been indicted by the United States Securities and Exchange Commission (SEC). The indictment is related to his alleged orchestration of a cryptocurrency scam. This scam is said to have specifically targeted police officers and first responders.
Furthermore, on August 23rd, an announcement alleged that DeSalvo gathered around $623,388 from 222 investors. This was done by selling his proprietary token, named Blazar, between November 2021 and May 2022.
DeSalvo asserted that Blazar would transform state pension systems for first responders, luring investors with high returns. He guaranteed Blazar Tokens could be acquired through pretax deductions from paychecks, like pension, 401k, and IRA contributions.
During his pursuit of investments, DeSalvo made false claims that his token had received official recognition as a registered security token by the SEC. However, the token hadn’t been officially registered with the regulatory authority.
Despite stating an initial insider “lock-up” timeframe, DeSalvo sold 41 billion Blazar tokens worth $51,000 right after the token’s launch on the decentralized exchange PancakeSwap in May 2022.
Cryptocurrency Scam Alert: SEC Targets DeSalvo for Token Sell-Off and Subsequent Investor Losses
In DeSalvo’s token sale, investors couldn’t sell their holdings. Additionally, in less than two weeks after DeSalvo’s PancakeSwap transaction, the Blazar token’s value dropped over 99.9%, causing major financial losses for investors. The SEC, in its statement, mentioned:
DeSalvo’s massive volume of sales placed downward pressure on the Blazar Token’s trading price and drained PancakeSwap of the majority of its liquidity in the investment, resulting in its collapse and substantial investor losses.
The SEC is pursuing a permanent injunction against DeSalvo, aiming to prevent him from engaging in any future security offerings. Furthermore, they are seeking imposition of fines and restitution of profits accrued through the fraudulent scheme.
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