Court halted bankruptcy plan of cryptocurrency Ponzi scheme on fraudulent intent

A U.S. bankruptcy court rejected a $12.5 million Chapter 11 protection application filed by a debtor accused of operating a cryptocurrency Ponzi scheme, citing the debtor’s intention to have fraudulent intentions and failed to prove his good faith reorganization. The program promises 15% monthly gains through unregistered tokens, but failed in regulatory investigations. The Securities and Exchange Commission (SEC) has filed a civil lawsuit seeking more than $40 million in damages, suggesting that scrutiny of cryptocurrency fraud and bankruptcy abuse is strengthening.