Jeremy McAlpine and Zachary Matar Sentenced for Roles in Crypto Scam

Two men hailing from Orange County have been sentenced to prison terms for their roles in a crypto scam that may have cheated investors out of nearly $2 million. Sentencing was passed to Jeremy David McAlpine (26 years old) of Fountain Valley, California, and Zachary Michael Matar (29 years of old) of Huntington Beach, California on Monday, August 1.

Jeremy McAlpine and Zachary Matar Sentenced to Prison

The former was sentenced to three years, while the latter will spend two years and six months behind bars. Both had previously been charged by the U.S. Attorney’s Office with securities fraud.

Both men are believed to have persuaded hundreds, if not thousands of potential clients into purchasing a new crypto token called DROP. The pair claimed to be utilizing a new automated trading bot they were calling “Dex” that they said would give buyers exclusive access to a profitable trading program that would provide high-level returns for all participants.

Sadly, prosecutors say none of the money investors gave the two men were used to invest in crypto of any kind. Rather, the money was doled out in payments to themselves and associates of their trading company. The scheme occurred through a company called Dropil. Based in Belize in Central America, McAlpine and Matar operated the enterprise out of their office in Fountain Valley.

While the company appears to be a standard crypto investing platform at the time of writing, neither of the men nor the company itself were ever registered with the Securities and Exchange Commission (SEC) as brokers or dealers according to federal prosecutors. This is required per U.S.-based financial regulations.

In addition, investors were told the only way they could gain access to the trading bot was by purchasing DROP tokens. Both men claimed the bot was an “expertly managed portfolio balancing algorithm,” yet it appears the product was nowhere near as profitable as the men claimed.

A defense sentencing brief explained the following about the culprits:

They were young entrepreneurs, excited to be a part of a new wave of crypto technology, and they failed to understand the legal requirements that applied to their digital assets or the consequences for failing to adhere to those requirements.

This Is Becoming Too Common

According to prosecutors, both Matar and McAlpine showed great remorse for their actions. They acknowledged the financial harm they caused to their clients, and said they were regretful of their actions. They were also quick to assume responsibility and accept their fates.

Crypto crime has become something of a serious issue in recent years given that crypto prices have risen exponentially. One of the most recent examples came in the form of a cyberattack on the northern California-based crypto exchange Harmony, which ultimately saw more than $100 million in digital funds vanish overnight.

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