Fake Bitcoin Creator Could Face Jail Time

Steve Chen, architect of an elaborate financial scam based on “Gemcoin,” may face jail time for fraud. A federal judge last month found that Gemcoin – a supposed cryptocurrency backed by amber mines – was fraudulent. Chen himself “has shown no sign of recognition of wrongdoing and has offered no assurances against future violations,” wrote U.S. District Court Judge R. Gary Klausner in a summary judgment against him. Gemcoin’s parent company, Alliance Finance Group, and its subsidiary, United States Fine Investment Arts, were raided in October 2015 by federal and local authorities. In court filings, the SEC argued that the remaining issues in Chen’s case should be determined by the judge and not a jury, and that the judge should find “in favor of sizeable penalties.” A group of investors has also filed suit against Chen in Los Angeles Superior Court.