The founder of a crypto firm was sentenced to 37 months for fraud, with the amount involved reaching $7 million

According to a disclosure by the U.S. Department of Justice recently, Justin Ryan Schmidt, the founder of the crypto financial services company Translunar, has pleaded guilty to charges related to wire fraud and could face up to 37 months in prison.

According to court documents, between 2020 and 2022, Schmidt induced multiple victims to participate in investments by falsely claiming that the funds had received regulatory approval and that actual investment returns were substantial. The amount involved exceeds $7 million.

Prosecutors said Schmidt for a long time concealed the true destination of the funds and, even knowing that the project carried risks, continued to pass along false information to investors, resulting in property losses for multiple people. Currently, the case is still under further investigation, and more individuals involved may be held accountable later.

Separately, reports say Translunar had previously promoted itself as a financial services company focused on investments in cryptocurrencies and digital assets, and claimed that its funds had obtained relevant approvals from the U.S. Securities and Exchange Commission. But an investigation found that its business credentials and investment returns had serious problems.

Industry insiders believe this case once again reminds investors that investing in crypto assets remains a high-risk area. Claims made by project teams such as “high returns” and “regulatory compliance” need to be verified rigorously to avoid falling into fraud traps.