The U.S. Securities and Exchange Commission (SEC) has charged two New York-based digital asset investment advisors for their roles in alleged fraudulent schemes involving the virtual currency Metaverse ETP (ETP). According to the SEC’s complaint, Tyler Smith and FITMGS Partners LLC (FITMGS) claimed to have insider information about the price movements of ETP and misled investors about their access to “exclusive trading algorithms and strategies.” As a result, the defendants in the case allegedly caused investors to suffer at least $2 million in losses. Smith, the sole principal of FITMGS, was also charged with using customer funds from his digital asset advisory firm to purchase cryptocurrency for his own personal account and making risky investments without disclosing such risks to clients. Smith also allegedly provided false account statements to conceal his fraudulent activity. The SEC is seeking an asset freeze, disgorgement of allegedly ill-gotten gains with interest, and other relief from the defendants as the agency continues to pursue its case.
