The Securities and Exchange Commission (SEC) has charged the exiled Chinese business tycoon Miles Guo with fraud related to crypto and other assets.
The charges from the SEC relate to the sale of what is referred to as “unregistered and fraudulent offerings,” which raised more than $850 million for Guo, according to a press release from Wednesday.
As part of the fraud charges were also charges related to the sale of cryptoassets referred to as H-Coin, Himalaya Coin or HCN, and a related stablecoin. The SEC also said Guo has made false promises to investors in H-Coin, telling them that the coin is 20% backed by gold and that he would compensate investors for any losses in the coin.
Associated with Steve Bannon
Miles Guo, who is also known by his Chinese name Guo Wengui and sometimes as Miles Kwok, is a New York-based businessman closely related with Donald Trump’s former advisor Steve Bannon. The two have built up a substantial online presence together, and often appear in online videos where they criticize the Chinese Communist Party and its leadership.
Guo was charged alone for the crypto-related fraud, and together with his financial advisor William Je on the other charges.
Used to fund luxury lifestyle
Guo and Je “misappropriated a large portion of the funds raised from investors to enrich themselves and their family members,” the SEC said.
Part of this was from a private placement of common stock in GTV Media Group, Inc., where $100 million of investor funds were diverted to a hedge fund said to be for the “sole benefit of a company that is owned by Guo’s son.”
The agency said that the money was used on fund Guo and his family’s luxury lifestyle. This included $40 million to purchase and renovate a New Jersey mansion, and $3.5 million for a Ferrari for his son.
“We allege that Guo was a serial fraudster, who raised more than $850 million by promising investors outsized returns on purported crypto, technology and luxury good investment opportunities,” Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, said in a comment.