The US Securities and Exchange Commission has been handed a $1.1 million court victory after a man it accused of running a crypto scam failed to answer the agency’s lawsuit.
A Georgia federal court judge submitted a default judgment in the SEC’s favor on June 3 in its case against Keith Crews, who failed to respond or defend himself against the SEC’s lawsuit that it filed in August 2023.
Judge Tiffany Johnson ordered Crews to pay financial penalties of over $1.1 million, finding him liable for disgorgement of $530,000 in net profits from his alleged misconduct and ordered him to pay prejudgment interest of almost $51,000 and a civil penalty of $530,000.
The judge ruled that Crews is also permanently banned from future violations of securities laws.
The SEC alleged Crews carried out a crypto fraud scheme through his companies, Four Square Biz and Stem Biotech, between October 2019 and May 2021.
The SEC claimed he raised at least $800,000 from approximately 200 investors through the sale of a “purported crypto asset security” named “Stemy Coin,” and that many of the investors were “solicited through relationships in African-American and church communities.”
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The regulator accused Crews of making false claims to investors, such as the token being backed by stem cell technology and hard assets like gold, and that his company had existing labs, products, and a track record of delivering stem cell treatments.
Fake labs and partnerships
The SEC claimed Crews touted partnerships with doctors and research teams, whereas in reality, the firm had no labs, products, research, partners or stem cell technology.
“Crews and his entities had no existing stem cell technology, products, or operations, there was no partnership with the claimed entities,” the agency said in its complaint.
The complaint alleged violations of multiple federal securities laws, including Securities Act fraud provisions, Exchange Act fraud provisions and registration violations.
The judgment represents a rare crypto-related victory for the SEC, which has wound down its crypto enforcement actions under the Trump administration this year.
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