SEC Accuses 2 Firms of Crypto Pump-and-Dump Scheme

The complaint alleges the two companies pumped the price of their cryptocurrency by falsely claiming they had acquired $10 billion in gold bullion to back it.

AccessTimeIconSep 30, 2022 at 4:21 p.m. UTC
Updated May 11, 2023 at 6:14 p.m. UTC

The U.S. Securities and Exchange Commission has filed charges against Bermuda-based Arbitrade Ltd and Canada-based Cryptobontix, as well as their principals, for carrying out an alleged pump-and-dump scheme involving a crypto asset called “Dignity” or “DIG,” according to a press release.

According to the complaint, the two firms falsely claimed between May 2018 and January 2019 that Arbitrade had acquired and received title to $10 billion in gold bullion, and that the company planned to back each DIG token issued and sold to investors with $1 worth of this gold.

In reality, however, the SEC claims the gold acquisition transaction was a ruse to boost demand for DIG, allowing the company’s principals to sell at least $36.8 million of DIG, including to U.S. investors, at inflated prices.

The SEC is charging the defendants with violating the antifraud and securities registration provisions of the federal securities laws.

The complaint seeks permanent injunctive relief, disgorgement plus prejudgment interest, and civil penalties against all of the defendants, as well as officer-and-director bars against the individual defendants.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Nelson Wang

Nelson Wang was CoinDesk's news editor for the East Coast. He holds BTC and ETH above CoinDesk's disclosure threshold of $1,000.

Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.

Read more about