The U.S. Securities and Exchange Commission (SEC) has secured a significant legal victory in its ongoing campaign against cryptocurrency fraud.
A federal judge in Georgia ordered Keith Crews to pay over $1.1 million in penalties to the SEC.
The decision followed Crews’ failure to respond to allegations brought against him in August 2023.
Judge Tiffany Johnson issued a default judgment after Crews did not appear or mount a defense in court.
The judgment includes $530,000 in disgorgement of illicit profits, nearly $51,000 in prejudgment interest, and a $530,000 civil penalty.
In addition to the monetary penalties, Crews was permanently barred from violating federal securities laws in the future.
Fraud Scheme Centered on “Stemy Coin” and Targeted Community Trust
According to the SEC, Crews orchestrated a deceptive cryptocurrency investment scheme between October 2019 and May 2021 through his companies, Four Square Biz and Stem Biotech.
The scheme involved the sale of a fraudulent crypto asset dubbed “Stemy Coin,” which the SEC claims raised at least $800,000 from around 200 investors.
Many victims were targeted within African-American and faith-based communities, leveraging personal and church relationships to establish trust.
The SEC’s complaint emphasized that Crews misled investors by claiming the coin was backed by cutting-edge stem cell technology and tangible assets like gold, giving the illusion of legitimacy and security.
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False Claims of Scientific Backing and Nonexistent Partnerships
The SEC’s investigation revealed that the entire operation was based on fabricated claims.
Crews allegedly misrepresented that his company had ongoing partnerships with doctors and research institutions and that it owned functioning labs and active stem cell product lines.
However, the SEC found that there were no labs, no research, no technology, and no partnerships of any kind.
The complaint detailed how Crews’ misleading promotional efforts were used to falsely inflate the credibility of the venture.
These actions violated multiple federal securities laws, including the antifraud provisions of both the Securities Act and the Exchange Act, as well as laws requiring the registration of securities offerings.
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Broader Implications Amid Ongoing Crypto Regulation Efforts
This court ruling marks a rare but notable enforcement success for the SEC in the crypto sector, especially as regulatory momentum has fluctuated in recent years.
Under the Trump administration, the pace of crypto-related actions slowed, but this case underscores the agency’s continued commitment to protecting investors from fraudulent digital asset schemes.
The outcome not only delivers restitution but sends a strong message that the SEC is prepared to pursue and penalize individuals who exploit emerging technologies to deceive investors.
With growing scrutiny on digital assets and a maturing regulatory environment, the SEC’s victory in the Crews case highlights both the risks in unregulated crypto markets and the importance of legal accountability.
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