$50 million crypto fraud complaint against Malta company founded by Olympic medallist

Retired Olympic speed skating champion Apolo Ohno and companies in Cyprus, Hong Kong, Malta, and Singapore are being sued in California for an alleged $50 million crypto fraud.

Apolo Anton Ohno is an American retired short track speed skating competitor and an eight-time medallist in the Winter Olympics. Ohno is the most decorated American Olympian at the Winter Olympics and was inducted into the U.S. Olympic Hall of Fame in 2019.

Ohno, three companies he allegedly founded – Hybrid Trade Limited, Allysian Sciences, and Asia Digital Exchange – are defendants, along with Rod Jao, Eugenio Pugliese, and Henry Liu, in a complaint fied at a United States federal court in Los Angeles.

Hybrid represents itself as a Hong Kong company, but it is registered 93 Mill Street, Qormi, Malta, apart from doing business in Singapore.

The plaintiffs Brian Kang, Skyblock LLC, Mid-Wilshire Consulting LLC, Prasad Hurra, David Kim, Blue Rock Group, Artemio Verduzo, David Kwon, and Young Jae Kwon alleged that the defendants raised $50 million in digital tokens, and later misappropriated the money raised.

The causes of action include securities fraud, negligent misrepresentation, breach of contract, promissory fraud, unjust enrichment, fraudulent conveyance, and the sale of unregistered securities.

The allegation is that between January 2018 and 6 June 2018, the defendants offered and sold digital tokens and raised approximately $50 million from investors from around the world, including within the United States.

However, the sale of the so-called Hybrid Tokens was never registered with the United States Securities and Exchange Commission, and this deprived investors of the benefit of the disclosures required by the American securities laws.

The plaintiffs said the Defendants have yet to satisfy any of their commitments to investors. “Defendants squandered and/or misappropriated, and purported to lose by theft, all or nearly all of the approximately $50 million raised through their offer and sale of Hybrid Tokens. Defendants’ offer and sale of Hybrid Tokens was, in actuality, a mere vessel for defendants’ personal enrichment. This is precisely the sort of scenario the federal securities laws were enacted to prevent,” the plaintiffs said.

The defendants were accused of trying to avoid the reach of the federal securities laws by characterising the Hybrid Token as a ‘utility token’. “Here, defendants’ sale of Hybrid Tokens had all the hallmarks of a securities offering under the securities laws and was therefore required to be registered with the SEC. No exemption to the registration requirement was available for Defendants’ offer and sale,” the plaintiffs said.