PHOENIX— A Nigerian man and his companies have been told to cease and desist by the Arizona Corporation Commission for allegedly stealing an Arizona security dealer’s identity and engaging in a fraud scheme involving cryptocurrency.
The Arizona Corporation Commission issued a temporary cease and desist order on October 1, 2020, against Abuchi Okoye of Nigeria and his affiliated company, Coininvest, to stop offering and selling investments in cryptocurrency and other alternative investments.
According to the Commission’s Securities Division, Okoye and Coininvest have allegedly stolen the identity of an Arizona registered securities dealer and are misrepresenting their imposter website of Arcadia-Capital.net as being that of the registered dealer. The Commission’s Securities Division alleges Okoye and Coininvest are soliciting investors to purchase investments in cryptocurrency via the pirated website and a social media account, claiming to be a dealer located in Phoenix, Arizona. The actual Arizona business is managed by an Arizona resident who has no relationship with or connection to Okoye and Coininvest.
Also, the Commission’s Securities Division alleges Okoye and Coininvest are misrepresenting their investment program as a safe and secure investment with an assured profit when cryptocurrency is often considered to be a volatile investment.
According to the Commission, alternative investments such as cryptocurrency are not typically backed by tangible assets, are not issued by a government authority and may be subject to little or no regulation.
The Commission shared additional concerns about investments in cryptocurrency include:
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Cryptocurrency is susceptible to cyber-attacks and there may be no recourse should the virtual currency disappear.
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Cryptocurrency accounts are not insured by the Federal Deposit Insurance Corporation (FDIC), which insures bank deposits up to $250,000.
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Investments tied to virtual currency may be unsuitable for most investors due to their volatility.
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Investors in cryptocurrency will be highly reliant upon unregulated companies that may lack appropriate internal controls and may be more susceptible to fraud and theft than regulated financial institutions.
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Cryptocurrency owners may experience difficulty or delays in liquidating their holdings or transferring them back into cash.