A crypto fraud scheme has come to light, implicating John A. DeSalvo, a former lieutenant at the New Jersey Department of Corrections, in a complex web of deceit that specifically targeted police officers and first responders.
The US Securities and Exchange Commission has filed charges against DeSalvo, alleging him of orchestrating of a cryptocurrency scam that targeted law enforcement officers.
Under the spotlight of the SEC’s investigation, DeSalvo stands accused of raising $623,388 from 222 investors between November 2021 and May 2022. His alleged weapon of choice was his own creation: the Blazar token.
Crypto Scam Targeting Cops With False Promises
DeSalvo boldly declared that this digital currency would upend the traditional state pension systems catering to police, paramedics, and firefighters, ensuring remarkable returns for investors. Social media served as his hunting ground, where he strategically lured unsuspecting individuals into his scheme.
What adds a chilling layer of deception to the case is DeSalvo’s background as a former corrections officer. Exploiting the trust vested in his former role, he managed to convince fellow law enforcement personnel to invest their hard-earned savings in his fraudulent venture.
Total crypto market cap reached $1.04 trillion today. Chart: TradingView.com
Gurbir S. Grewal, SEC Director of Enforcement, expressed the agency’s strong condemnation, highlighting the audacity of DeSalvo’s actions:
“What’s particularly offensive about this case is that DeSalvo used his status as a former corrections officer to gain the trust of fellow law enforcement personnel, a number of whom invested their savings with him.”
The breach of trust has left many shaken, with James Carter, President of the New Jersey State Police Benevolent Association, denouncing the betrayal as beyond comprehension.
Deceitful Claims And Devastating Consequences
The web of deceit spun wider as DeSalvo allegedly made false statements while soliciting investors. He claimed that his token had achieved “securitization” with the SEC, despite lacking the necessary registration.
Moreover, despite assuring investors of an initial “lock-up” period for insiders, DeSalvo purportedly sold a staggering 41 billion Blazar tokens—equivalent to $51,000—on PancakeSwap, a decentralized exchange, in May 2022.
As investors found themselves unable to sell, the former corrections officer’s actions dealt a devastating blow. In less than two weeks after his PancakeSwap sale, the Blazar token’s value plummeted by over 99.9%, leaving investors grappling with significant losses.
SEC And The Need For Strong Regulation
As the SEC takes the reins, seeking justice and restitution, the case underscores the critical need for strong regulation and heightened investor vigilance within the ever-evolving cryptocurrency landscape.
It also serves as a stark reminder of the fragility of trust in our crucial public services, a trust that must be diligently upheld to safeguard the integrity of institutions and communities alike.
Featured image from www.northjersey.com