Denaro Fraudulent Initial Coin Offering

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Denaro Logo/Website

Denaro was marketed as a seamless payment ecosystem bridging cryptocurrencies and the mainstream market, offering web wallets, physical debit cards, merchant payment terminals, and IBAN services. Denaro's versatile payment solution aimed to solve the problem of spending cryptocurrencies in the physical world. Reports surfaced of fraudulent activities by Ivars Auzins, the alleged mastermind behind Denaro, including using fake identities, fictitious entities, and misappropriating investor funds. The SEC filed a complaint against Auzins, accusing him of defrauding retail investors out of at least $7 million through fraudulent digital asset securities offerings. The complaint alleges that Auzins falsely claimed Denaro offered a multi-currency debit card platform but did not deliver any of the promised products or services.

This is a global/international case not involving a specific country.

About Denaro

"Denaro seamless payment ecosystem bridges the divide between cryptocurrencies and the mainstream market. The platform enables companies and individuals to send, spend, store, and exchange cryptos and fiat through secure web wallets, physical debit cards, merchant payment terminals, and IBAN."

"Denaro is a versatile payment solution that enable users to store, spend, and transfer their cryptocurrencies on an intuitive interface and debit card that addresses crypto’s number one problem – physically spending it."

"Denaro has developed secure and customizable SCI/APIs for merchant services that will facilitate the payments of goods and services online or offline using a web wallet or a physical debit card respectively."

"Tired of juggling all those ETH and BTC wallets? Utilising Denaro’s multi-cryptocurrency wallet, you no longer need multiple addresses. Not only does it allow you to receive and store multiple cryptocurrencies under one address, it also allows you to spend them at any ATM or store."

"Denaro will be rewarding early contributors/investors and community participation with a generous bonus-and-referral commission system. The bonus system rewards early contributions based on tokens sold in our pre-sale and main-sale events, while the referral side of the commission system issues community members with 3% of every purchase made by their referral(s). The pre-sale bonus system consists of a 25% bonus for investors contributing. It lasts the entire duration of the pre-sale - 7 days.

The public/main-sale bonus system consists of a 25% bonus for the first 15 million tokens sold, 15% for the following 20 million tokens sold, 5% for the next 25 million tokens sold and then no bonus for the final 5 million tokens sold. There are 65 million tokens in total to be sold during the public sale."

"As ICO is coming to an end make sure to get your Denaro tokens. We are still having bonuses active - so now is the time. Visit Denaro.io"

"The Denaro Whitepaper contained a detailed roadmap stating the company had engaged in various activities relating to the business such as attracting private investors and developing a beta wallet."

"More strong evidence is that their employees are fake too.

Jeremy Boker's pic is from pexels

Amy Archer's pic is also copied from another site

Everyone please be careful of ICOs. There are plenty good ones but DYOR. I avoided this ICO straightaway when I saw the frontpage literred with discounts and their whitepaper was horribly written."

"Auzins took numerous steps to conceal his true identity in connection with the Denaro ICO. He signed up for accounts associated with Denaro—including website registration, website security, email, and credit cards used to purchase these services—using the name of a Turkish national. Auzins obtained a copy of this individual’s Turkish passport, which he then used to satisfy any “know your customer” requirements for each website. For entities that had a more stringent verification process and required additional customer information such as a utility bill, Auzins provided a fraudulent document purportedly showing the Turkish national’s gas bill for a fictitious London address."

"Auzins registered a legal entity—Cryptoshine LTD—with the U.K. Companies House to lend legitimacy to the Denaro offering, when in fact this legal entity did not represent an actual business. Moreover, the address Auzins provided for Cryptoshine belonged to an individual who had never heard of the company prior to receiving correspondence from aggrieved investors."

"Although the Denaro Whitepaper detailed certain future uses for the DNO Token, at the time of the offering the DNO token had no consumptive use."

"As alleged, Auzins and co-conspirators induced investors to invest in the Auzins Entities through a series of material misrepresentations and omissions about the products and services that the Auzins Entities claimed to provide, the profits that investors would earn by investing in the Auzins Entities and the individuals who operated the Auzins Entities. For example, in its marketing materials, Denaro stated that its Chief Executive Officer, “Ron Ramsey,” previously was an executive at a technology company based in Ohio, its Chief Financial Officer, “Jeremy Boker,” obtained a degree from a university in Kentucky, and that it issued debit cards associated with a credit card company based in New York. These representations were false. After soliciting investors in its ICO, Denaro stopped its public advertising campaign, its website became publicly inaccessible, and its investors lost their investments."

"The Securities and Exchange Commission today charged a Latvian citizen with defrauding hundreds of retail investors out of at least $7 million through two separate fraudulent digital asset securities offerings."

"According to its website, Denaro raised more than $11 million in Bitcoin, Ethereum, Litecoin, and U.S. dollars from thousands of investors."

"According to the civil complaint, filed in U.S. District Court for the Eastern District of New York, Ivars Auzins defrauded U.S. and foreign investors through the unregistered offer and sale of digital asset securities in an initial coin offering and a purported digital asset cloud mining program. Auzins allegedly used fake names, fictitious entities, and fraudulent profiles to perpetrate his schemes, and misappropriated nearly all of the investor funds that were raised."

"the complaint alleges that, from January 2018 through March 2018, Auzins fraudulently offered and sold unregistered digital tokens as part of an ICO of Denaro, a purported "multi-currency debit card platform." Specifically, the complaint alleges that Auzins falsely claimed Denaro enabled users to store their digital assets in a secure digital wallet and then spend them "like any other debit card" which could be provided by a credit card issuer. In fact, the complaint alleges, all of the claimed products or services being offered were fictitious, including the relationship with the credit card issuer. Finally, the complaint alleges that Auzins misappropriated all of the ICO’s proceeds."

"As we allege, Auzins was engaged in a brazen scheme to defraud retail investors under the guise of profitable digital asset opportunities," said Kristina Littman, Chief of the SEC Enforcement Division’s Cyber Unit. "We will continue to detect and pursue those that seek to victimize investors in the digital asset space."

This is a global/international case not involving a specific country.

The background of the exchange platform, service, or individuals involved, as it would have been seen or understood at the time of the events.

Include:

• Known history of when and how the service was started.
• What problems does the company or service claim to solve?
• What marketing materials were used by the firm or business?
• Audits performed, and excerpts that may have been included.
• Business registration documents shown (fake or legitimate).
• How were people recruited to participate?
• Public warnings and announcements prior to the event.

Don't Include:

• Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.
• Anything that wasn't reasonably knowable at the time of the event.

There could be more than one section here. If the same platform is involved with multiple incidents, then it can be linked to a main article page.

The Reality

This sections is included if a case involved deception or information that was unknown at the time. Examples include:

• When the service was actually started (if different than the "official story").
• Who actually ran a service and their own personal history.
• How the service was structured behind the scenes. (For example, there was no "trading bot".)
• Details of what audits reported and how vulnerabilities were missed during auditing.

What Happened

The specific events of the loss and how it came about. What actually happened to cause the loss and some of the events leading up to it.

Key Event Timeline - Denaro Fraudulent Initial Coin Offering

Date	Event	Description
January 30th, 2018	Pre-ICO Phase	Denaro’s unregistered offering began with the offer and sale of tokens during a “preICO” phase from January 30, 2018 through February 6, 2018.
February 25th, 2018	Ability To Sell Token	In a February 25, 2018 post on Bitcointalk, Denaro highlighted the liquidity of the token by noting that DNO token holders “could sell the token for fiat or other cryptocurrencies.”
March 11th, 2018 11:56:00 AM MDT	ICO Coming To An End	The Denaro team announces that their ICO is coming to an end and "make sure to get your Denaro tokens".
March 19th, 2018	Administrators Withdrawn	On or around March 19, 2018, Denaro withdrew the administrators for its Telegram and Facebook groups.
March 22nd, 2018 4:44:21 PM MDT	Reddit Public Post	Reddit post reports that the team "haven't messaged on their telegram for ages, no email responses, denaro tokens were distributed but it's worthless now".
March 23rd, 2018 9:50:44 AM MDT	Online Ventures Video	The Online Ventures channel on YouTube publishes a video covering the incident with the website offline. On or around March 23, 2018, Denaro’s website was taken down and no further updates were provided to the Denaro community.
December 2nd, 2021	SEC Complaint Published	The Security and Exchange Commission posts a public complaint about the initial coin offering.

Technical Details

This section includes specific detailed technical analysis of any security breaches which happened. What specific software vulnerabilities contributed to the problem and how were they exploited?

Total Amount Lost

The total amount lost has been estimated at $7,000,000 USD.

How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?

Immediate Reactions

How did the various parties involved (firm, platform, management, and/or affected individual(s)) deal with the events? Were services shut down? Were announcements made? Were groups formed?

Ultimate Outcome

What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?

Total Amount Recovered

There do not appear to have been any funds recovered in this case.

What funds were recovered? What funds were reimbursed for those affected users?

Ongoing Developments

What parts of this case are still remaining to be concluded?

Individual Prevention Policies

No specific policies for individual prevention have yet been identified in this case.

For the full list of how to protect your funds as an individual, check our Prevention Policies for Individuals guide.

Platform Prevention Policies

Policies for platforms to take to prevent this situation have not yet been selected in this case.

For the full list of how to protect your funds as a financial service, check our Prevention Policies for Platforms guide.

Regulatory Prevention Policies

No specific regulatory policies have yet been identified in this case.

For the full list of regulatory policies that can prevent loss, check our Prevention Policies for Regulators guide.