Two crypto founders have been sentenced to federal prison for scamming investors out of $1.9 million.
A release by the U.S. Attorney’s office in California has it that Jeremy McAlpine and Zachary Matar have been convicted of securities fraud.
McAlpine and Matar were sentenced to 3 years and 2.5 years in prison, respectively.
McAlpine and Matar founded Dropil 2017. Dropil is a crypto company established in Belize but operating out of Fountain Valley, California.
Dropil created a crypto trading program, an altcoin called DROP, and Dex, an automated trading bot that used DROP.
McAlpine, Matar, and Dropil did not register DROP with the Securities and Exchange Commission (SEC), according to the release.
McAlpine and Matar also “made a series of false statements to investors,” claiming that Dex would generate annual returns of 24-63%.
McAlpine and Matar also “manufactured fake Dex profitability reports, giving the false appearance that Dex was operational and profitable.”
The duo also created other fake documents claiming that Dropil had raised $54 million from 34,000 investors when it had only raised less than $2 million from under 2,500 investors.
Before the sentencing, McAlpine and Matar pled guilty to one count each of securities fraud and over two years after the SEC first charged McAlpine and Matar with defrauding investors.