A crypto trader is taking an investment company in the US to court over claims that their “misrepresentations and omissions” led him to lose out in the markets.
Lijun Sun, who is Chinese and lives in the US state of California, says that he has lost around $2 million as a result of the alleged crypto fraud.
According to a filing made at a court in recent days, Sun says that he was tricked out of his money following sham advice which led him to an Ethereum-related coin known as MCash.
The investment advisory company, Blue Ocean Capital Group, is now facing charges of violating the Securities and Exchange Act, common law fraud provisions and more.
MCash is based around Ethereum, which is one of the world’s largest and most well-known crypto spheres. However, MCash itself does not share that same legitimacy – and industry press claim that it currently has a market value of exactly $0.00.
MCash is not authorised for trading by the American Securities and Exchange Commission.
Now, the firm which advised Sun to make the investment is facing demands to cancel the investment, send back the money which was invested in MCash – and pay a significant sum of damages, believed to be around $6 million US dollars.
The filing, which was made in the United States District Court in the Southern District of New York, outlines several different claims against the firm.
“Defendants violated the federal securities laws by selling MCash Tokens from the United States, and accepting Plaintiff’s money in a U.S. bank account without properly registering MCash Tokens with the SEC”, it alleges.
As well as alleging that Blue Ocean Capital and the two named defendants behind it lied outright to Sun, it also suggests that they failed to tell him about the existence of both a third party company and a 12-month lockup period.
“In addition to selling unregistered securities to Plaintiff, Defendant Zhang, on behalf of Blue Ocean Capital and at Defendant Liu’s direction, committed federal securities law fraud and common law fraud under New York law by making numerous material misrepresentations and omissions about the MCash Token investment opportunity”, the filing said.
“Plaintiff relied on those material misrepresentations when he decided to invest in MCash Tokens.”
“Only after Plaintiff wired Defendants the funds did Plaintiff learn that: (1) Plaintiff would have to enter into a Token Purchase Agreement not with Blue Ocean Capital—to which he had wired $2 million—but with another company, which the Defendants had failed to disclose”, it said.
In addition: “(2) MCash Tokens were unregistered securities; (3) there was no legal market for MCash Tokens in the United States; and (4) there was a one-year lockup period for the investment.”
It is currently unclear what Blue Ocean Capital’s stated position on the matter is or whether they accept or deny the charges. According to industry press, the firm’s website has gone down – but they continue to maintain a YouTube presence.