Alleged head of $3.5M crypto mining scam bought stake in nightclub

A man in the US is being sued by the Securities and Exchange Commission (SEC) for allegedly running a fraudulent cryptocurrency mining operation.

According to a complaint dated January 8, Donald G. Blakstad swindled more than $3.5 million from investors using three separate companies.

The businesses included a vehicle parts holding firm, an oil and gas firm, and “Energy Sources International” (ESI), a purported cryptocurrency mining operation where Blakstad was the only employee.

“This matter involves an offering fraud orchestrated by Blakstad in which he raised approximately $3.544 million from at least 14 investors through the fraudulent offer and sale of securities in three companies he owned and controlled,” the complaint reads.

“Instead of investing as promised, Blakstad used the majority of investor proceeds for his personal benefit, including spending funds on personal entertainment, the purchase of a stake in a nightclub, the purchase of…