United States authorities have sentenced a CEO of an investment firm to prison for orchestrating a fraudulent crypto scheme. In the crypto scam, known as ‘cherry picking,’ he collected funds from investors for trading but would only later decide whether to allocate the trades to the investors or himself based on their profitability.
“Kambolin defrauded investors located in the United States and abroad by, among other things, depriving them of profitable trades,” the report states.
Cherry Picking Crypto Scam
According to a statement released by the United States Department of Justice (DoJ), Peter Kambolin, CEO of Systematic Alpha Management was sentenced to two-years in prison for allegedly leading a crypto scam referred to as cherry picking.
“During the relevant period, Kambolin executed trades for pool participants together with trades he executed on behalf of his proprietary accounts, and fraudulently allocated the profits and losses of the trades to benefit his own accounts.”
Cherry-picking is a fraudulent scheme where an individual executes trades without attributing those trades to a particular trading account. This is not done until the individual determines whether or not the trade has become profitable or suffered losses.
However, Kambolin effectively monitored the performance of all trades throughout the day, selectively retaining the most profitable crypto trades for himself. Meanwhile, this allowed him to enjoy the advantages of risk-free…