SEC v. Ivars Auzins; Ron Ramsey; and Daniel Gaines, No. 1:21-cv-06693, Eastern District of New York (Dec. 3, 2021) — Complaint

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Richard Best
Kristina Littman
Lara S. Mehraban
John O. Enright
Thomas P. Smith, Jr.
Todd D. Brody
Jon A. Daniels
Attorneys for Plaintiff
SECURITIES AND EXCHANGE COMMISSION
New York Regional Office
Brookfield Place
200 Vesey Street, Suite 400
New York, New York 10281-1022
(212) 336-0080 (Brody)
[email protected]

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK

SECURITIES AND EXCHANGE
COMMISSION,

                                             Plaintiff,

                        -against-

IVARS AUZINS, A/K/A RON RAMSEY and
DANIEL GAINES,

                                             Defendant.

COMPLAINT

21 Civ. 6693 (       )

JURY TRIAL DEMANDED

Plaintiff Securities and Exchange Commission (“Commission”), for its Complaint against
Defendant Ivars Auzins, a/k/a Ron Ramsey and Daniel Gaines (“Auzins” or “Defendant”), alleges
as follows:
SUMMARY
1. This matter involves the fraudulent offer and sale of unregistered securities,
including digital asset securities, by Auzins, a Latvian national.

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2. Between 2018 and 2019, Auzins orchestrated numerous fraudulent schemes,
including: (1) the Denaro initial coin offering (“ICO”) and (2) the Innovamine cloud mining
platform.
3. Among other things, for the Denaro and Innovamine fraudulent schemes, Auzins (1)
used fictitious names, fraudulent addresses, and fake phone numbers to register fictitious legal
entities; (2) created fraudulent online profiles for individuals—including the use of stock
photographs—that were used in the marketing of each scheme; and (3) falsely claimed to have
developed certain capabilities for each of the companies that were entirely fictional.
4. Auzins claimed to have collected at least $11 million in digital assets and fiat currency
in connection with the Denaro scheme and collected at least $7 million in digital assets and fiat
currency in connection with the Innovamine scheme based on extensive misrepresentations
regarding nearly every aspect of the two securities offerings.
5. The collected assets were obtained from hundreds of retail investors, including
investors in the United States.
6. In reality, these online platforms were elaborate frauds designed to trick investors
into thinking that their funds would be invested in legitimate enterprises. Instead, Auzins
misappropriated nearly all of the investor funds.

VIOLATIONS
7. By virtue of the foregoing conduct and as alleged further herein, Defendant has
violated Sections 5(a) and (c) and 17(a) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C.
§§ 77e(a), 77e(c), and 77q(a)], Section 10(b) of the Securities Exchange Act of 1934 (“Exchange
Act”) [15 U.S.C. §§ 78j(b)], and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].

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8. Unless Defendant is restrained and enjoined, he will engage in the acts, practices,
transactions, and courses of business set forth in this Complaint or in acts, practices, transactions,
and courses of business of similar type and object.
NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT
9. The Commission brings this action pursuant to the authority conferred upon it by
Securities Act Sections 20(b) and 20(d) [15 U.S.C. §§ 77t(b) and 77t(d)] and Exchange Act Section
21(d) [15 U.S.C. § 78u(d)].
10. The Commission seeks a final judgment: (a) permanently enjoining Defendant from
violating the federal securities laws and rules this Complaint alleges he has violated; (b) ordering
Defendant to disgorge all ill-gotten gains he received as a result of the violations alleged here and to
pay prejudgment interest thereon pursuant to 15 U.S.C. 15 U.S.C. §§ 78u(d)(3), 78u(d)(7), and
§ 78u(d)(5); (c) ordering Defendant to pay civil money penalties pursuant to Securities Act Section
20(d) [15 U.S.C. § 77t(d)] and Exchange Act Section 21(d)(3) [15 U.S.C. § 78u(d)(3)]; (d)
permanently prohibiting Defendant from serving as an officer or director of any company that has a
class of securities registered under Exchange Act Section 12 [15 U.S.C. § 78l] or that is required to
file reports under Exchange Act Section 15(d) [15 U.S.C. § 78o(d)], pursuant to Securities Act
Section 20(e) [15 U.S.C. § 77t(e)] and Exchange Act Section 21(d)(2) [15 U.S.C. § 78u(d)(2)]; (e)
permanently enjoining Defendant from participating, directly or indirectly, in any offering of a digital
asset security; provided, however, that such injunction shall not prevent Defendant from purchasing
or selling digital asset securities for his own personal account; and (f) ordering any other and further
relief the Court may deem just and proper.

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JURISDICTION AND VENUE
11. This Court has jurisdiction over this action pursuant to Securities Act Section 22(a)
[15 U.S.C. § 77v(a)] and Exchange Act Section 27 [15 U.S.C. § 78aa].
12. Defendant, directly and indirectly, has made use of the means or instrumentalities of
interstate commerce or of the mails in connection with the transactions, acts, practices, and courses
of business alleged herein.
13. Venue lies in this District under Securities Act Section 22(a) [15 U.S.C. § 77v(a)] and
Exchange Act Section 27 [15 U.S.C. § 78aa]. Defendant has transacted business in the Eastern
District of  New York, and certain of  the acts, practices, transactions, and courses of  business
alleged in this Complaint occurred within this District, including offers and/or sales of  securities in
each of  the fraudulent schemes and communications with investors and potential investors in this
District.
DEFENDANT
14. Auzins, age 29, is a resident of Riga, Latvia. In connection with the fraudulent
schemes alleged in this case, Auzins used at least the following pseudonyms:  Ron Ramsey and
Daniel Gaines.
OTHER RELEVANT ENTITIES
15. Denaro was an online company with a website located at www.denaro.io. Neither
Denaro nor its securities were registered with the Commission. Ron Ramsey—a pseudonym used by
Auzins—was identified as Denaro’s CEO. In June 2017, Auzins—using the name Ron Ramsey—
registered the parent entity of Denaro, “Cryptoshine LTD,” with the U.K. Companies House. In its
registration form, Auzins provided a false London business address for Cryptoshine. The
Companies House ultimately dissolved Cryptoshine for failure to file required documents after its
initial registration.

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16. Innovamine was an online company with a website located at www.innovamine.io.
Neither Innovamine nor its securities were registered with the Commission. The contact person for
Innovamine was listed as Daniel Gaines—a pseudonym for Auzins. Innovamine claimed to be part
of Innovatrade PTY LTD, an entity formed in January 2019 that purported to be a “registered
company in Australia.”
FACTS
I. THE DENARO INITIAL COIN OFFERING
A. Background on Digital Assets and Initial Coin Offerings
17. The term “digital asset” generally refers to an asset that is issued and/or transferred
using distributed ledger or blockchain technology, including so-called “cryptocurrencies,” “coins,”
and “tokens.” Generally, after being issued, digital assets may be “listed” on online digital asset
trading platforms where they can be traded for other digital assets or fiat currency such as U.S.
dollars.
18. “Issuers” have offered and sold digital assets in fundraising events, called “initial coin
offerings” or “ICOs,” in exchange for consideration, which could be in the form of fiat currency or
other digital assets.
19. ICOs are typically announced and promoted through public online channels. The
documents soliciting the public to acquire digital assets in a particular offering are usually in the
form of a “whitepaper,” i.e., marketing materials describing the project and the terms of the ICO.
To participate, investors may transfer funds to a unique digital address set up by the issuer, and the
issuer may deliver digital assets to the ICO participant’s unique digital address on a distributed ledger
or blockchain.
20. Issuers have raised millions of dollars in fraudulent ICOs.

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21. On July 25, 2017, the SEC issued “The DAO Report of Investigation,” where it
noted that digital assets sold in ICOs may be securities subject to the federal securities laws.
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B. The Fraudulent Denaro ICO
22. In early 2018, Auzins conducted an unregistered sale of digital asset securities for
Denaro (the “Denaro ICO”). Auzins was ultimately responsible for all aspects of the Denaro ICO,
including the creation of Denaro’s website and marketing materials. Auzins also communicated with
investors and potential investors concerning the Denaro ICO.
23. 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.
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24. To communicate with third party service providers and investors without giving
away his location, Auzins anonymized his IP location using a virtual private network (“VPN”).
25. Auzins also purchased a “virtual phone number” that allowed him to have a
London-based phone number for Denaro, which was purportedly based in the United Kingdom.
26. In January 2018, Auzins began publicly promoting the Denaro ICO on social media,
including Denaro’s Twitter and Facebook accounts and on the messaging application Telegram.

1
 Report of Investigation Pursuant to Section 21(a) of the Securities Exchange Act of 1934: The
DAO, Exchange Act Rel. No. 81207 (July 25, 2017).
2
 Auzins followed the general process described in this paragraph and in the next two paragraphs for
both of the fraudulent schemes described in this Complaint.

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27. At the outset of the offering, Denaro retained Tokensuite, a digital marketing agency,
to promote the Denaro ICO on bitcointalk.org (“Bitcointalk”), an online forum for digital asset
enthusiasts and investors, and to recruit other individuals to promote the Denaro ICO on social
media.
28. Denaro also advertised on Cryptocompare.com, a website focusing on developments
in the digital asset space, and promoted the ICO in Cryptocompare’s newsletter.
29. Denaro’s unregistered offering began with the offer and sale of tokens during a “pre-
ICO” phase from January 30, 2018 through February 6, 2018.
30. According to a January 27, 2018 post on Bitcointalk by Tokensuite, this private sale
was intended for “early contributors and investors to expedite platform development and facilitate
the launch of the main/public token sale.” The official ICO period was from February 9 to March
16, 2018.
31. As detailed in Denaro’s marketing materials, Denaro intended to use the proceeds of
the ICO to “facilitate the development of the platform,” and Denaro described the official ICO
period on Bitcointalk as a “public crowdsale” and “fundraising” tool.
32. “DNO tokens” could be purchased by investors at a price set to the digital asset
ethereum (“ETH”), with 1 ETH equal to 3,000 DNO tokens.
33. To generate investor interest in the ICO, Denaro publicly released a whitepaper
describing Denaro’s business (the “Denaro Whitepaper”). Auzins wrote and/or edited the Denaro
Whitepaper and was ultimately responsible for the whitepaper and its content.
34. The Denaro Whitepaper was available on Denaro’s website and on various internet
platforms promoting either the Denaro ICO specifically or ICOs generally, including ICOBench,
Coinwoot, and Neironix. Clicking links on those internet platforms would direct prospective
investors to the Denaro Whitepaper on the Denaro website

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35. According to the Denaro Whitepaper, Denaro was a “multi-currency debit card
platform” that enabled users to store their digital assets in a secure digital wallet and then spend the
digital assets “like any other debit card.”
36. The DNO token was targeted primarily at speculators intending to invest in Denaro.
In addition, the DNO token was offered broadly to potential purchasers rather than being targeted
at expected users of the Denaro platform or those who had a need for the potential future
functionality of the network. Moreover, the tokens were offered in amounts that far exceeded
amounts commensurate with any consumptive use: for example, the Denaro Whitepaper indicated a
maximum investment of $100,000—with a possibility to negotiate directly with the company for
larger amounts—despite the fact that the stated token uses would not seem to require such large
holdings.
37. 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. 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.
38. The roadmap detailed the critical steps that the company would take to ensure the
success of the Denaro platform following the conclusion of the offering. Funds raised in the ICO
would purportedly be used by management to build and develop the Denaro ecosystem, which
included (1) finalizing the debit cards; (2) finalizing a bank partnership that would allow Denaro to
receive international transactions in fiat; and (3) developing Denaro applications for iOS and
Android.
39. The roadmap provided that the “Finished DENARO Project” would not be
completed until at least May 2018—two months after the offering—and, even then, the company

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would “continu[e] to improve DENARO project,” noting that “Quality-of-life improvements”
would take place from “2018 June – ongoing.”
40. According to the Denaro Whitepaper, Denaro would retain 21% of the total tokens
from the ICO for itself and its advisors. 7% of the ICO tokens were also designated by the company
to pay for future marketing, explaining that “Denaro will drum up publicity for the platform,
especially in the period leading to milestone releases/roadmap feature implementation.”
41. The Denaro Whitepaper also stated that “[a] portion of the network’s transaction
fees will be distributed among existing DNO holders when certain milestones are accomplished”—
in other words, Denaro offered a dividend-type distribution to ICO investors.
42. Denaro made clear in the Denaro Whitepaper and on posts on Bitcointalk that it
would support the market price for the DNO Token by limiting future supply, stating that no
Denaro tokens would ever be minted after the ICO, and that all unsold tokens from the offering
would be “burned.”
43. Denaro’s website and public posts touted the experience of the individuals
purportedly behind the offering, noting that the “hand-picked Denaro team are a collective
powerhouse of blockchain enthusiasts and are tenured specialists in each of their respective areas of
expertise.”
44. 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.”
The Denaro Whitepaper, responses on Bitcointalk to investors and potential investors, and emails to
investors on numerous dates, including February 9, 2018, March 11, 2018, and March 16, 2018, also
emphasized the availability of a secondary market in which to sell the DNO Tokens.
45. In the Denaro Whitepaper, for example, Denaro stated that the DNO token would
achieve “[l]isting on popular exchanges” by the end of May 2018.

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46. Denaro made clear that it would be instrumental in obtaining such listings: for
example, in a February 9, 2018 post on Bitcointalk, Denaro explained that the DNO token “will be
listed on as many major exchanges as we can get it listed on.” (emphasis added).
47. On March 10, 2018, Denaro announced to investors in an email that it had
confirmed its first “exchange listing” with the digital asset platform Yobit, and also noted that
Denaro “will start adding new exchanges [sic] few days after ICO ends.”
48. Denaro suggested to investors that the price of the DNO Token would appreciate,
with posts on its Twitter feed and Facebook page including emoji symbols of rockets taking off and
a chart with an upward trajectory, signifying that purchasers could expect profits.
49. On March 12, 2018—just days before the end of the public ICO period—Denaro
posted its last tweet from its Twitter account.
50. At the end of the ICO period on March 16, 2018, investors had not received their
DNO Tokens and the Denaro platform—including, for example, a debit card and Denaro
applications for iOS and Android—had not been developed as promised.
51. Investors also found that they were unable to retrieve their original digital asset
investment or withdraw the digital assets they had contributed to their Denaro wallets.
52. On or around March 19, 2018, Denaro withdrew the administrators for its Telegram
and Facebook groups.
53. On or around March 23, 2018, Denaro’s website was taken down and no further
updates were provided to the Denaro community.
54. In connection with the Denaro scheme, Auzins made numerous misrepresentations
to investors and potential investors concerning the company; the use and safety of their investments;
and the team behind the offering. Auzins, as the driving individual behind the offering and the only

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person associated with the company, knew or recklessly disregarded that these representations were
false or misleading.
55. 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.
56. Auzins also misrepresented the development and current status of the Denaro
platform at the time of the offering. All of the claimed products or services being offered were
fictitious.
57. Denaro’s website and marketing materials emphasized the advanced nature of its
digital asset wallet, which offered “IP-address protection, two-factor SMS authentication and two-
factor email authentication,” thereby providing “[u]nprecedented levels of security and protection.”
An online video evaluating the Denaro offering for potential ICO participants specifically
highlighted the wallet as the primary reason to invest, emphasizing that Denaro already had a
“[r]eadied and tested product.” Denaro, in fact, never developed a digital asset wallet.
58. On January 31, 2018, Denaro stated in online forums that it “already ha[d] signed
contracts with a [debit] card vendor. They will provide us with MasterCard debit cards.” The Denaro
Whitepaper even contained an image of a “Denaro Debit Card” with the MasterCard logo. On
February 25, the company claimed the Denaro Debit Cards supported worldwide ATM
functionality. In fact, the debit cards were fictitious and Denaro never had any relationship with
MasterCard.
59. Denaro’s debit card development was important to investors when they were
considering participating in the offering.

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60. Auzins also misled investors regarding the team behind the ICO. Marketing materials
for Denaro highlighted fictitious team members. The purported chief executive officer and co-
founder was identified on the website and in the Denaro Whitepaper as “Ron Ramsey,” an executive
with a “proven track record” who had previously worked as the “Economic Development Director
at London Computer Systems” where he was “actively following and researching blockchain
technology and the cryptocurrency movement that was occurring.”
61. Ramsey was not a real person. The photos of Ramsey used in Denaro’s offering
materials and public interviews were taken from the social media pages of a Turkish film director.
London Computer Systems never employed an individual named Ron Ramsey and the company
never had a title in its organization of “Economic Development Director.”
62. The purported chief financial officer and other co-founder was Jeremy Boker, who
purportedly completed a “Bachelor’s in Business at Kentucky State University” and obtained his
“Master’s in IT at London Metropolitan University.”
63. Boker also was not a reason person.  No individual with the name “Jeremy Boker”
ever attended Kentucky State University and the photo of “Boker” used in Denaro’s marketing
materials can be found on a stock photography site under “Elegant Male Portrait.”
64. At least 25 U.S. investors participated in the Denaro offering.
65. According to its website, Denaro raised more than $11 million in Bitcoin, Ethereum,
Litecoin, and U.S. dollars from thousands of investors.
66. Auzins misappropriated all of the ICO proceeds when he disappeared with the
invested funds and ignored demands from investors to return their money.

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II. THE INNOVAMINE CLOUD MINING SCHEME
A. Background on Digital Asset Mining
67. A blockchain, such as bitcoin, consists of a series of computer nodes run by people
or organizations, known as “miners”.
68. New unconfirmed transactions that are sent to the blockchain are collected together
into blocks by miners.
69. Miners compete with each other to be the first to solve a complex mathematical
problem, known as “proof of work’ – the winner then adds their block with their collection of
transactions to the existing blockchain.
70. Blocks are interconnected using a “hash” function. A hash is a mathematical
“summary” of a set of data – changing any part of that data results in a significant change to the
hash value, which makes it a very effective way of detecting changes in any set of data. By including
the hash of the previous block in the next block it becomes extremely hard to make changes to the
stored data.
71.  Calculating these hashes can be made arbitrarily hard by requiring that the hash
created starts with a particular character sequence. Solving this problem for a large valuable network
like bitcoin requires huge computing resources, and significant technical knowledge.
72. Miners often combine their computing power into a so-called “mining pool” which
increases the probability of winning the right to mine the next block, but reduces that payout per
miner.
73. Within a mining pool, individual miners receive a percentage of each win according
to the relative amount of computer power they provide.

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74. Traditionally miners owned and ran their own hardware, but now it is possible to
rent the use of the hardware from third parties, who provide “proof of work” mining as a “cloud
service” where the user pays to use the hardware or service.
75. Cloud mining can dramatically reduce the cost and complexity of becoming a miner,
but the rewards are lower because they are split among the cloud miners.
76. The mining hardware is located in a datacenter, which may be in a different location
from the person or organization operating the hardware.
77. In certain mining operations, investors can purchase participation interests or shares
in the mining operation.
B. The Innovamine Offering
78. In April 2019, Auzins published a website—innovamine.io—that purported to offer
a cloud mining and digital asset trading platform.  The administrative contact for Innovamine listed
on its website was listed as Daniel Gaines, CEO of the related entity Innovatrade PTY LTD, who
claimed to be based in Sydney, Australia.
79. Daniel Gaines, in fact, was a pseudonym for Auzins, who was ultimately responsible
for all aspects of the Innovamine scheme, including creation of the company’s website and
marketing materials, as well as communicating with investors.
80. Auzins publicly promoted Innovamine on social media platforms such as Facebook
and Twitter and on websites touting new digital asset offerings.
81. In an April 2019 press release, Innovamine described itself as a “state-of-the-art
cloud mining service” that allowed users to “purchase all the hash power they would need to mine
cryptocurrency.”

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82. Innovamine initially purported to offer cloud mining for three cryptocurrencies—
bitcoin, ethereum, and litecoin—but in mid-July 2019 claimed on its Twitter feed to have added
mining for Bitcoin Cash, ZCash, and DASH to its options.
83. Innovamine investors signed up for a two-year contract that purportedly included
mining of the digital asset of their choice and claimed to provide on a daily basis an “automatic
payout . . . in whichever coin they mine”; so-called “maintenance fees” were included as part of the
agreement.
84. The company claimed in a press release on April 9, 2019 to “have algorithms in place
to ensure that miners are allocated the fastest, most efficient [mining] pools.”
85. Innovamine also purported to offer trading in the same digital assets available for
mining.
86. Innovamine promised investors in the April 9, 2019 press release that it would
provide the equipment and personnel necessary to perform the mining; as a result, users could “do
all this [mining] without the hassle of intricate software installation or buying expensive hardware”
and then passively receive the returns generated by the company’s mining operation.
87. Innovamine highlighted its state-of-the-art mining facilities on the website and in a
marketing video, and emphasized the experience of its employees to potential investors. Innovamine
claimed on its website, for example, that its “team members are mining experts from a vast array of
scientific backgrounds.”
88. On Twitter and in communications with investors in July 2019, Innovamine claimed
that it had been “recognized as number one in the mining industry” and that it was “the top
performing mining company in the globe” and “the top mining company across the world.”
89. In the April 9, 2019 press release, Innovamine guaranteed profits for its mining
investors. As the company explained, all revenues from trading commissions were to be

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“channel[ed] . . . to the users [sic] mining profits . . . . And here is why, the goal is to make you earn
one way or another.” This approach thereby allowed Innovamine to “keep . . . the wheel of success
spinning for our users” and ensure that its investors “experience profit irregardless [sic] of the
mining result.”
90. A marketing email on July 11, 2019 from Innovamine similarly claimed that the
“InnovaMine platform is wired to help users get more for their investments. . . . We are all about
helping you get more for your money. Take action now and seize this opportunity!”
91. The Innovamine website also contained a “Profit Calculator” that showed—
depending on the digital asset being mined—the user’s hashrate, as well as the expected daily,
monthly, yearly, and 2-year profit in their account.
92. Early investors were initially able to withdraw funds from their accounts –
purportedly representing mining profits – and verification of these withdrawals were publicly posted
on Telegram and Bitcointalk.
93. In early July 2019, Innovamine announced the launch of the “Innovamine
Mastercard” debit card that would purportedly allow digital asset withdrawals at ATMs around the
world.
94. A July 12, 2019, email to investors from Innovamine also promised a digital asset
“exchange platform” for its investors.
95. On July 15, 2019, Auzins abandoned the Innovamine website and various social
media accounts associated with the scheme, stopped responding to investor messages, and deleted
the Telegram chat group where investors and potential investors had communicated with the
company.
96. Investors who had contributed to Innovamine were subsequently unable to withdraw
any funds.

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97. The representations made by Auzins concerning Innovamine were entirely false. As
the driving individual behind the offering and the only person associated with the company, Auzins,
knew or recklessly disregarded that the representations were false or misleading because there were
no actual mining operations.
98. Auzins registered a fictitious legal entity—Innovatrade PTY LTD—with the
Australian Securities and Investments Commission (“ASIC”), when in fact this legal entity did not
represent an actual business.
99. In the April 9, 2021 press release, Innovamine specifically touted this regulatory
registration in an effort to reassure investors, stating that: “You should not be worried about
Innovamine’s credibility, as the company is regulated by [ASIC].”
100. All of the claimed mining services being offered through Innovamine were fictitious.
There was no “team of mining experts” with a “vast array of scientific backgrounds” responsible for
overseeing the company’s mining operations; it was only Auzins. Indeed, when an investor emailed
Innovamine on June 28, 2019 and asked to visit Innovamine’s facilities in Australia—where the
company claimed to be located on its website—so that he could verify for himself the mining
arrangement, Innovamine responded the following day that “[o]ur mining facilities are in Ukraine”
and the investor was unable to visit the purported mining operation.
101. Innovamine was never “recognized as number one in the mining industry” by any
person or entity nor was it the “top performing mining company in the globe”—again, because the
company in fact had no actual mining operations.
102. A report by the Australian Competition & Consumer Commission—an entity that
collects information regarding purported scams based in that country—stated that losses reported
by Innovamine victims totaled more than $7 million.

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103. At least six investors based in the United States invested in Innovamine, with losses
totaling more than $50,000.
IV. AUZINS’ NUMEROUS ADDITIONAL FRAUDULENT SCHEMES
3

104. To date the Commission has identified numerous other fraudulent schemes
perpetrated by Auzins.
105. Similar to the Denaro ICO scheme, starting in December 2017, Auzins fraudulently
promoted an unregistered coin offering for Bitroad Limited, a U.K. entity registered with the U.K.
Companies House.
106. Like the Denaro ICO, Auzins publicly promoted the Bitroad ICO through social
media posts as well as on a public chat group on the Telegram application. Bitroad also released a
whitepaper available on Bitroad’s website and through various internet platforms promoting the
Bitroad ICO, including Bitcointalk.
107. Auzins’ false statements in connection with Bitroad included that Bitroad had
different types of wallets (desktop, web-based, and mobile) to store user’s digital assets as well as a
debit card that could be used “anytime all over the world.” In fact, Bitroad wallets and debit card did
not exist. Auzins also falsely named Bitroad’s core team members who would be responsible for
developing the project including CEO Noel Mills, a finance manager, marketing experts, and
technical developers. There was no person named Noel Mills associated with Bitroad.  Bitroad had
no finance manager, marketing experts, or technical developers.  The only person associated with
Bitroad was Auzins.

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 While the Commission does not presently assert independent claims against Auzins based on the
additional fraudulent schemes described in this section of the Complaint, these schemes are both
relevant to demonstrate Auzins’ scienter in the charged frauds as well as to the ultimate
determination of the appropriate relief should Auzins be found liable.

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108. On December 28, 2017, Bitroad posted its last message on Bitcointalk, one of the
primary avenues that Bitroad had used to communicate with the public. The following day, Bitroad
posted the last tweet from its Twitter account.
109. According its public statements on Bitcointalk, Bitroad raised more than $3 million
in bitcoin and ethereum from investors.
110. On April 12, 2018, the Companies House dissolved Bitroad for “non-compliance for
failing to file statutory documents.”
111. Separately, on January 17, 2019, Auzins published a website—gemneon.io—that
claimed to be a digital asset investment and trading platform.
112. “Michael Schultz”—a pseudonym for Auzins—was identified on the website as the
CEO of Gemneon.
113. Auzins was ultimately responsible for all aspects of the Gemneon scheme, including
creation of the website and marketing materials and communicating with investors.
114. According to its website and a whitepaper posted on the site (the “Gemneon
Whitepaper”), Gemneon offered a digital asset-related investment program that “help[s] people . . .
make profitable investments in the cryptocurrency market.” Although the company provided few
details regarding the program, the general concept was that investors contributed digital assets to
Gemneon and the company made digital asset-related trades on their behalf.
115. Gemneon offered three different investment plans that promised specified daily
returns depending on the amount of money invested. According to the Gemneon website, an
investor’s principal could be withdrawn after 50 days.
116. Gemneon promised profits to investors in its program. In addition to daily returns
guaranteed by each investment plan, the company explained on its website that “[o]nce the platform
comes online, all investors will be able to trade their money through our platform, not to mention

20
start making a handsome profit.” The Gemneon Whitepaper and website claimed that “[i]nvestors
make money off the price fluctuation that crypto currencies are so famous for having.” The website
and Whitepaper also noted that “the more money you invest the more you can expect to make.”
117. In February 2019—prior to the specified withdrawal date that would have allowed
investors to take out their principal—Auzins abandoned the Gemneon website, stopped responding
to investor messages, and deleted the Telegram chat group where investors and potential investors
had been communicating with the company.
118. Auzins made numerous misrepresentations in connection with the Gemneon
scheme. Auzins, who directed all activities relating to Gemneon, knew these representations were
false or misleading, including (1) registering a fictitious legal entity—Gem Investments Limited—
with the Hong Kong Companies Registry and touting its Hong Kong registration to reassure
investors; and (2) falsely claiming to have a “large team of seasoned traders and investors[, which]
almost guarantees that the investment will turn a profit as we put that money through multiple
crypto trades.” Gemneon did not have any trading program, and there was no “team” of traders
responsible for overseeing the company’s trading operations. Auzins was the sole individual behind
Gemneon.
119. The total amount received in the Gemneon scheme is unknown.
120. When Auzins abandoned the Gemneon website in February 2019, investors who had
contributed digital assets to Gemneon for trading and investment were no longer able to access their
accounts and were unable to withdraw any funds.
121. Auzins misappropriated the Gemneon funds when he disappeared with nearly all of
the digital assets that had been sent to his wallets in connection with the offering.
122. Auzins also published four additional webpages purporting to offer a digital asset
investment platform similar to Gemneon:  (1) bankroi.io (“BankRoi”); (2) impressio.io

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(“Impressio”); (3) changepro.io (“ChangePro”); and (4) lycovest.io (“Lycovest”) (collectively, the
“Investment Plan Websites”). The Investment Plan Websites were generally promoted on social
media platforms as well as Bitcointalk and other websites.
123. The Investment Plan Websites offered the same basic investment scheme as
Gemneon. Investors were encouraged to transfer digital assets to private wallets maintained by the
offering entity. The Investment Plan Websites claimed that these digital assets would be invested
using proprietary trading methods and that users would receive a guaranteed, exorbitant rate of
return based on the extraordinary profits earned by the experienced team behind each offering.
124. Portions of each website were frequently recycled in later schemes: the BankRoi site
copied extensively from Impressio, for example, while the ChangePro, Gemneon, and Lycovest
webpages contained numerous similarities.
125. All of the Investment Plan Websites claimed that investors’ principal could be
withdrawn after a specified period. At a certain point prior to that specified date, however, Auzins
abandoned the website and the various social media accounts associated with each scheme, stopped
responding to investor messages, and deleted the Telegram chat groups where investors and
potential investors had been communicating with the company. Investors who had contributed to
these websites were subsequently unable to withdraw any funds.
4

4
 In addition to the schemes discussed above, Auzins also created the following 24 investment
schemes and websites, many of which have also been publicly alleged to be frauds: bitwest.biz (Bit
West Limited); bitfine.biz (Bitfine Limited); coinstreamlimited.com and fundstream.biz (Coinstream
Ltd); forksmine.biz (Forks Mining Ltd.); bitgrow.biz (Bitgrow Investments Limited); bithonest.ltd
(Bithonest Ltd.); bitone.io (Bitone Financial LP); bithorn.io (Bithorn Limited); ultraminers.biz
(Ultrafarm Ltd.); 15bit.biz (Bitcoin Miners 15 LTD); cryptoinfinity.net (CryptoInfinity Limited);
bitstorm.biz (Bitstorm Limited); theminers.biz (Miners Team Limited); prefex.net (PREFEX
Investments Online Limited); 8dailycoin.com (Daily Coins INV Ltd.); cryptonium.biz (Cryptonium
Limited); bitexcon.com (Bitex Limited); bitmach.net (Bitmach Limited); 10bit.biz (TEN Bitcoins
Limited); coinscrypt.net (CoinsCrypt LTD); skyminerz.biz (Sky Mine LTD); bitday.biz (Bitday
Limited); cryptoshare.biz (Cryptocom.Limited); and mbitco.com (Mbitco Limited).

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V. THE DIGITAL ASSETS WERE OFFERED AND SOLD AS SECURITIES
126. The digital assets offered and sold by Auzins in the Denaro and Innovamine
schemes (as well as in the other six schemes described in Section IV above) were offered and sold to
potential investors as an investment of money in a common enterprise with a reasonable expectation
of profits to be generated from the efforts of the issuers and, as such, were “investment contracts”
and, therefore, “securities” within the meaning of Section 2(a)(1) of the Securities Act [15 U.S.C.
§ 77b(a)(1)] and Section 3(a)(10) of the Exchange Act [15 U.S.C. § 78c(a)(10)].
127. With respect to Denaro, the company’s statements made clear that the DNO tokens
were investments from which investors could reasonably expect future profits:  (1) the Denaro white
paper, emails to investors, and other public statements specifically referred to the ICO participants
as “investors”; (2) in public forum posts, Denaro emphasized that DNO token holders “could sell
the token for fiat or other cryptocurrencies”; (3) the Denaro Whitepaper, emails, and public posts
highlighted the availability of a secondary market for DNO tokens; and (4) Denaro’s social media
posts suggested that DNO tokens’ price would appreciate.
128. With respect to Denaro, the company’s statements made clear that this was a
common enterprise.
129. As explained in the Denaro Whitepaper, all proceeds from the offering were
intended to be collected and held by the company; the dividend-type payment would distribute its
network transaction fees among existing token DNO token holders; and the fortunes of the
investors would rise and fall together based on the value of token they were purchasing.  As such,
there was horizontal commonality between the DNO token holders.
130. Denaro’s retention of more than a quarter of the total tokens from the ICO for itself
and its advisors meant that the company’s fortunes would rise and fall with those of the investors.
As such, there was vertical commonality between the company and the investors.

23
131. Investors reasonably expected to profit from appreciation in the DNO token, both
from appreciation in the value of the token and through the dividend-type distributions promised by
the company.
132. Moreover, the profits were expected to be generated through the efforts of Denaro.
DNO tokens were sold before people could conduct transactions with DNO tokens (requiring
reliance on the founders’ managerial efforts) and funds raised would purportedly be used by Denaro
management to build and develop ecosystem for DNO tokens, which included: (1) finalizing debit
cards; (2) finalizing a bank partnership enabling Denaro to receive international transactions in fiat;
and (3) developing Denaro apps for the iOS and Android operating systems.
133. With respect to Innovamine, investors reasonably believed that they would make
money from participating in the mining pool and Innovamine promised its mining investors profits
on the funds they invested “regardless of the mining result.”
134. Likewise, statements from the company also made clear that the expected profits
would be generated through the efforts of Innovamine management. Innovamine emphasized to
investors how easy and effortless Innovamine and its experienced team made mining for digital
assets. Once purchasers invested in their desired digital asset pool, investors engaged in no further
actions. Instead, all purported mining would occur as a result of Innovamine’s efforts. Innovamine
was entirely responsible for the equipment purchase, operation, and maintenance of the purported
mining operation. Innovamine controlled the payout to investors. Indeed, Innovamine’s
representations that it was a “top performing” manager with regard to the above undertakings are
the reason why an investor would choose to invest in Innovamine’s mining contracts rather than
invest in their own mining equipment and operation.
135. Innovamine was a common enterprise.

24
136. Digital assets contributed by Innovamine investors were purportedly pooled together
and used by Innovamine to purchase mining hardware, thereby creating economies of scale that
would allow Innovamine to achieve greater hashing power in the collective mining operation than
had the investors had tried to mine individually.  Mining returns generated by these pools would
purportedly be shared by Innovamine with investors on a pro-rata basis.  The fortunes of the
Innovamine investors were, thus, directly correlated, demonstrating horizontal commonality.
FIRST CLAIM FOR RELIEF
Violations of Securities Act Section 17(a)

137. The Commission realleges and incorporates by reference here the allegations in
paragraphs 1 through 136.
138. Defendant, directly or indirectly, singly or in concert, in the offer or sale of securities
and by the use of the means or instruments of transportation or communication in interstate
commerce or the mails, (1) knowingly or recklessly employed one or more devices, schemes or
artifices to defraud, (2) knowingly, recklessly, or negligently obtained money or property by means
of one or more untrue statements of a material fact or omissions of a material fact necessary in order
to make the statements made, in light of the circumstances under which they were made, not
misleading, and/or (3) knowingly, recklessly, or negligently engaged in one or more transactions,
practices, or courses of business which operated or would operate as a fraud or deceit upon the
purchaser.
139. By reason of the foregoing, Defendant, directly or indirectly, singly or in concert, has
violated and, unless enjoined, will again violate Securities Act Section 17(a) [15 U.S.C. § 77q(a)].

25
SECOND CLAIM FOR RELIEF

Violations of Exchange Act Section 10(b) and Rule 10b-5 Thereunder

140. The Commission realleges and incorporates by reference here the allegations in
paragraphs 1 through 136.
141. Defendant, directly or indirectly, singly or in concert, in connection with the
purchase or sale of securities and by the use of means or instrumentalities of interstate commerce, or
the mails, or the facilities of a national securities exchange, knowingly or recklessly (i) employed one
or more devices, schemes, or artifices to defraud, (ii) made one or more untrue statements of a
material fact or omitted to state one or more material facts necessary in order to make the
statements made, in light of the circumstances under which they were made, not misleading, and/or
(iii) engaged in one or more acts, practices, or courses of business which operated or would operate
as a fraud or deceit upon other persons.
142. By reason of the foregoing, Defendant, directly or indirectly, singly or in concert, has
violated and, unless enjoined, will again violate Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] and
Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].
THIRD CLAIM FOR RELIEF

Violations of Securities Act Sections 5(a) and (c)

143. The Commission realleges and incorporates by reference here the allegations in
paragraphs 1 through 136.
144. Defendant directly or indirectly, singly or in concert, (i) made use of means or
instruments of transportation or communication in interstate commerce or of the mails to sell,
through the use or medium of a prospectus or otherwise, securities as to which no registration
statement was in effect; (ii) for the purpose of sale or for delivery after sale, carried or caused to be
carried through the mails or in interstate commerce, by any means or instruments of transportation,

26
securities as to which no registration statement was in effect; or (iii) made use of means or
instruments of transportation or communication in interstate commerce or of the mails to offer to
sell or offer to buy, through the use or medium of a prospectus or otherwise, securities as to which
no registration statement had been filed.
145. By reason of the foregoing, Defendant violated and, unless enjoined, will again
violate, Securities Act Sections 5(a) and 5(c) [15 U.S.C. §§ 77e(a) and 77e(c)].
PRAYER FOR RELIEF
 WHEREFORE, the Commission respectfully requests that the Court enter a Final
Judgment:
I.
Permanently enjoining Auzins and his agents, servants, employees, and attorneys and all
persons in active concert or participation with any of them from violating, directly or indirectly,
Securities Act Sections 5(a) and (c) and 17(a) [15 U.S.C. §§ 77e(a), 77e(c), and 77q(a)] and Exchange
Act Section 10(b) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].
II.
Ordering Defendants to disgorge with prejudgment interest all ill-gotten gains from the
conduct alleged in this Complaint pursuant to Section 21(d)(3), (5), and (7) of the Exchange Act [15
U.S.C. §§ 78u(d)(3), 78u(d)(5), and 78u(d)(7)];
III.
Ordering Auzins to pay civil monetary penalties under Securities Act Section 20(d)
[15 U.S.C. § 77t(d)] and Exchange Act Section 21(d)(3) [15 U.S.C. § 78u(d)(3)];

27
IV.
Permanently prohibiting Auzins from serving as an officer or director of any company that
has a class of securities registered under Exchange Act Section 12 [15 U.S.C. § 78l] or that is
required to file reports under Exchange Act Section 15(d) [15 U.S.C. § 78o(d)], pursuant to
Securities Act Section 20(e) [15 U.S.C. § 77t(e)] and Exchange Act Section 21(d)(2) [15 U.S.C.
§ 78u(d)(2)];
V.
Permanently enjoining Auzins from participating, directly or indirectly, in any offering of a
digital asset security; provided, however, that such injunction shall not prevent Auzins from
purchasing or selling digital asset securities for his own personal accounts; and
VI.
Granting any other and further relief this Court may deem just and proper.

Dated:  New York, New York
December 2, 2021
            /s/            Richard            R.            Best
RICHARD R. BEST
REGIONAL DIRECTOR
KRISTINA LITTMAN
CHIEF, CYBER UNIT
Lara S. Mehraban
John O. Enright
Thomas P. Smith, Jr.
Todd D. Brody
Jon A. Daniels
Attorneys for Plaintiff
SECURITIES AND EXCHANGE COMMISSION
New York Regional Office
Brookfield Place
200 Vesey Street, Suite 400
New York, New York 10281-1022
(212) 336-0080 (Brody)
[email protected]

1 
 

Richard Best 
Kristina Littman 
Lara S. Mehraban 
John O. Enright 
Thomas P. Smith, Jr. 
Todd D. Brody 
Jon A. Daniels 
Attorneys for Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 
New York Regional Office 
Brookfield Place  
200 Vesey Street, Suite 400 
New York, New York 10281-1022 
(212) 336-0080 (Brody) 
[email protected] 
 
UNITED STATES DISTRICT COURT 
EASTERN DISTRICT OF NEW YORK 

 
SECURITIES AND EXCHANGE 
COMMISSION, 
 
                                             Plaintiff, 
 
                        -against- 
 
IVARS AUZINS, A/K/A RON RAMSEY and 
DANIEL GAINES, 
  
                                             Defendant.  
 

 
 
COMPLAINT 

   
21 Civ. 6693 (       ) 

 
   

JURY TRIAL DEMANDED 
  

           
          

 
Plaintiff Securities and Exchange Commission (“Commission”), for its Complaint against 

Defendant Ivars Auzins, a/k/a Ron Ramsey and Daniel Gaines (“Auzins” or “Defendant”), alleges 

as follows: 

SUMMARY 

1. This matter involves the fraudulent offer and sale of unregistered securities, 

including digital asset securities, by Auzins, a Latvian national. 

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2. Between 2018 and 2019, Auzins orchestrated numerous fraudulent schemes, 

including: (1) the Denaro initial coin offering (“ICO”) and (2) the Innovamine cloud mining 

platform. 

3. Among other things, for the Denaro and Innovamine fraudulent schemes, Auzins (1) 

used fictitious names, fraudulent addresses, and fake phone numbers to register fictitious legal 

entities; (2) created fraudulent online profiles for individuals—including the use of stock 

photographs—that were used in the marketing of each scheme; and (3) falsely claimed to have 

developed certain capabilities for each of the companies that were entirely fictional. 

4. Auzins claimed to have collected at least $11 million in digital assets and fiat currency 

in connection with the Denaro scheme and collected at least $7 million in digital assets and fiat 

currency in connection with the Innovamine scheme based on extensive misrepresentations 

regarding nearly every aspect of the two securities offerings. 

5. The collected assets were obtained from hundreds of retail investors, including 

investors in the United States. 

6. In reality, these online platforms were elaborate frauds designed to trick investors 

into thinking that their funds would be invested in legitimate enterprises. Instead, Auzins 

misappropriated nearly all of the investor funds.  

VIOLATIONS 

7. By virtue of the foregoing conduct and as alleged further herein, Defendant has 

violated Sections 5(a) and (c) and 17(a) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. 

§§ 77e(a), 77e(c), and 77q(a)], Section 10(b) of the Securities Exchange Act of 1934 (“Exchange 

Act”) [15 U.S.C. §§ 78j(b)], and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. 

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8. Unless Defendant is restrained and enjoined, he will engage in the acts, practices, 

transactions, and courses of business set forth in this Complaint or in acts, practices, transactions, 

and courses of business of similar type and object.   

NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT 

9. The Commission brings this action pursuant to the authority conferred upon it by 

Securities Act Sections 20(b) and 20(d) [15 U.S.C. §§ 77t(b) and 77t(d)] and Exchange Act Section 

21(d) [15 U.S.C. § 78u(d)]. 

10. The Commission seeks a final judgment: (a) permanently enjoining Defendant from 

violating the federal securities laws and rules this Complaint alleges he has violated; (b) ordering 

Defendant to disgorge all ill-gotten gains he received as a result of the violations alleged here and to 

pay prejudgment interest thereon pursuant to 15 U.S.C. 15 U.S.C. §§ 78u(d)(3), 78u(d)(7), and 

§ 78u(d)(5); (c) ordering Defendant to pay civil money penalties pursuant to Securities Act Section 

20(d) [15 U.S.C. § 77t(d)] and Exchange Act Section 21(d)(3) [15 U.S.C. § 78u(d)(3)]; (d) 

permanently prohibiting Defendant from serving as an officer or director of any company that has a 

class of securities registered under Exchange Act Section 12 [15 U.S.C. § 78l] or that is required to 

file reports under Exchange Act Section 15(d) [15 U.S.C. § 78o(d)], pursuant to Securities Act 

Section 20(e) [15 U.S.C. § 77t(e)] and Exchange Act Section 21(d)(2) [15 U.S.C. § 78u(d)(2)]; (e) 

permanently enjoining Defendant from participating, directly or indirectly, in any offering of a digital 

asset security; provided, however, that such injunction shall not prevent Defendant from purchasing 

or selling digital asset securities for his own personal account; and (f) ordering any other and further 

relief the Court may deem just and proper.  

  

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JURISDICTION AND VENUE 

11. This Court has jurisdiction over this action pursuant to Securities Act Section 22(a) 

[15 U.S.C. § 77v(a)] and Exchange Act Section 27 [15 U.S.C. § 78aa]. 

12. Defendant, directly and indirectly, has made use of the means or instrumentalities of 

interstate commerce or of the mails in connection with the transactions, acts, practices, and courses 

of business alleged herein. 

13. Venue lies in this District under Securities Act Section 22(a) [15 U.S.C. § 77v(a)] and 

Exchange Act Section 27 [15 U.S.C. § 78aa]. Defendant has transacted business in the Eastern 

District of  New York, and certain of  the acts, practices, transactions, and courses of  business 

alleged in this Complaint occurred within this District, including offers and/or sales of  securities in 

each of  the fraudulent schemes and communications with investors and potential investors in this 

District. 

DEFENDANT 

14. Auzins, age 29, is a resident of Riga, Latvia. In connection with the fraudulent 

schemes alleged in this case, Auzins used at least the following pseudonyms:  Ron Ramsey and 

Daniel Gaines. 

OTHER RELEVANT ENTITIES 

15. Denaro was an online company with a website located at www.denaro.io. Neither 

Denaro nor its securities were registered with the Commission. Ron Ramsey—a pseudonym used by 

Auzins—was identified as Denaro’s CEO. In June 2017, Auzins—using the name Ron Ramsey—

registered the parent entity of Denaro, “Cryptoshine LTD,” with the U.K. Companies House. In its 

registration form, Auzins provided a false London business address for Cryptoshine. The 

Companies House ultimately dissolved Cryptoshine for failure to file required documents after its 

initial registration. 

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16. Innovamine was an online company with a website located at www.innovamine.io. 

Neither Innovamine nor its securities were registered with the Commission. The contact person for 

Innovamine was listed as Daniel Gaines—a pseudonym for Auzins. Innovamine claimed to be part 

of Innovatrade PTY LTD, an entity formed in January 2019 that purported to be a “registered 

company in Australia.”   

FACTS 

I. THE DENARO INITIAL COIN OFFERING 

A. Background on Digital Assets and Initial Coin Offerings 

17. The term “digital asset” generally refers to an asset that is issued and/or transferred 

using distributed ledger or blockchain technology, including so-called “cryptocurrencies,” “coins,” 

and “tokens.” Generally, after being issued, digital assets may be “listed” on online digital asset 

trading platforms where they can be traded for other digital assets or fiat currency such as U.S. 

dollars.  

18. “Issuers” have offered and sold digital assets in fundraising events, called “initial coin 

offerings” or “ICOs,” in exchange for consideration, which could be in the form of fiat currency or 

other digital assets.  

19. ICOs are typically announced and promoted through public online channels. The 

documents soliciting the public to acquire digital assets in a particular offering are usually in the 

form of a “whitepaper,” i.e., marketing materials describing the project and the terms of the ICO. 

To participate, investors may transfer funds to a unique digital address set up by the issuer, and the 

issuer may deliver digital assets to the ICO participant’s unique digital address on a distributed ledger 

or blockchain.  

20. Issuers have raised millions of dollars in fraudulent ICOs. 

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21. On July 25, 2017, the SEC issued “The DAO Report of Investigation,” where it 

noted that digital assets sold in ICOs may be securities subject to the federal securities laws.1 

B. The Fraudulent Denaro ICO 

22. In early 2018, Auzins conducted an unregistered sale of digital asset securities for 

Denaro (the “Denaro ICO”). Auzins was ultimately responsible for all aspects of the Denaro ICO, 

including the creation of Denaro’s website and marketing materials. Auzins also communicated with 

investors and potential investors concerning the Denaro ICO. 

23. 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.2 

24. To communicate with third party service providers and investors without giving 

away his location, Auzins anonymized his IP location using a virtual private network (“VPN”). 

25. Auzins also purchased a “virtual phone number” that allowed him to have a 

London-based phone number for Denaro, which was purportedly based in the United Kingdom. 

26. In January 2018, Auzins began publicly promoting the Denaro ICO on social media, 

including Denaro’s Twitter and Facebook accounts and on the messaging application Telegram. 

                                                 
1 Report of Investigation Pursuant to Section 21(a) of the Securities Exchange Act of 1934: The 
DAO, Exchange Act Rel. No. 81207 (July 25, 2017). 
2 Auzins followed the general process described in this paragraph and in the next two paragraphs for 
both of the fraudulent schemes described in this Complaint.   

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27. At the outset of the offering, Denaro retained Tokensuite, a digital marketing agency, 

to promote the Denaro ICO on bitcointalk.org (“Bitcointalk”), an online forum for digital asset 

enthusiasts and investors, and to recruit other individuals to promote the Denaro ICO on social 

media. 

28. Denaro also advertised on Cryptocompare.com, a website focusing on developments 

in the digital asset space, and promoted the ICO in Cryptocompare’s newsletter. 

29. Denaro’s unregistered offering began with the offer and sale of tokens during a “pre-

ICO” phase from January 30, 2018 through February 6, 2018. 

30. According to a January 27, 2018 post on Bitcointalk by Tokensuite, this private sale 

was intended for “early contributors and investors to expedite platform development and facilitate 

the launch of the main/public token sale.” The official ICO period was from February 9 to March 

16, 2018. 

31. As detailed in Denaro’s marketing materials, Denaro intended to use the proceeds of 

the ICO to “facilitate the development of the platform,” and Denaro described the official ICO 

period on Bitcointalk as a “public crowdsale” and “fundraising” tool. 

32. “DNO tokens” could be purchased by investors at a price set to the digital asset 

ethereum (“ETH”), with 1 ETH equal to 3,000 DNO tokens. 

33. To generate investor interest in the ICO, Denaro publicly released a whitepaper 

describing Denaro’s business (the “Denaro Whitepaper”). Auzins wrote and/or edited the Denaro 

Whitepaper and was ultimately responsible for the whitepaper and its content. 

34. The Denaro Whitepaper was available on Denaro’s website and on various internet 

platforms promoting either the Denaro ICO specifically or ICOs generally, including ICOBench, 

Coinwoot, and Neironix. Clicking links on those internet platforms would direct prospective 

investors to the Denaro Whitepaper on the Denaro website 

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35. According to the Denaro Whitepaper, Denaro was a “multi-currency debit card 

platform” that enabled users to store their digital assets in a secure digital wallet and then spend the 

digital assets “like any other debit card.” 

36. The DNO token was targeted primarily at speculators intending to invest in Denaro. 

In addition, the DNO token was offered broadly to potential purchasers rather than being targeted 

at expected users of the Denaro platform or those who had a need for the potential future 

functionality of the network. Moreover, the tokens were offered in amounts that far exceeded 

amounts commensurate with any consumptive use: for example, the Denaro Whitepaper indicated a 

maximum investment of $100,000—with a possibility to negotiate directly with the company for 

larger amounts—despite the fact that the stated token uses would not seem to require such large 

holdings.  

37. 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. 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. 

38. The roadmap detailed the critical steps that the company would take to ensure the 

success of the Denaro platform following the conclusion of the offering. Funds raised in the ICO 

would purportedly be used by management to build and develop the Denaro ecosystem, which 

included (1) finalizing the debit cards; (2) finalizing a bank partnership that would allow Denaro to 

receive international transactions in fiat; and (3) developing Denaro applications for iOS and 

Android. 

39. The roadmap provided that the “Finished DENARO Project” would not be 

completed until at least May 2018—two months after the offering—and, even then, the company 

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would “continu[e] to improve DENARO project,” noting that “Quality-of-life improvements” 

would take place from “2018 June – ongoing.” 

40. According to the Denaro Whitepaper, Denaro would retain 21% of the total tokens 

from the ICO for itself and its advisors. 7% of the ICO tokens were also designated by the company 

to pay for future marketing, explaining that “Denaro will drum up publicity for the platform, 

especially in the period leading to milestone releases/roadmap feature implementation.” 

41. The Denaro Whitepaper also stated that “[a] portion of the network’s transaction 

fees will be distributed among existing DNO holders when certain milestones are accomplished”—

in other words, Denaro offered a dividend-type distribution to ICO investors. 

42. Denaro made clear in the Denaro Whitepaper and on posts on Bitcointalk that it 

would support the market price for the DNO Token by limiting future supply, stating that no 

Denaro tokens would ever be minted after the ICO, and that all unsold tokens from the offering 

would be “burned.” 

43. Denaro’s website and public posts touted the experience of the individuals 

purportedly behind the offering, noting that the “hand-picked Denaro team are a collective 

powerhouse of blockchain enthusiasts and are tenured specialists in each of their respective areas of 

expertise.” 

44. 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.”  

The Denaro Whitepaper, responses on Bitcointalk to investors and potential investors, and emails to 

investors on numerous dates, including February 9, 2018, March 11, 2018, and March 16, 2018, also 

emphasized the availability of a secondary market in which to sell the DNO Tokens. 

45. In the Denaro Whitepaper, for example, Denaro stated that the DNO token would 

achieve “[l]isting on popular exchanges” by the end of May 2018.   

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46. Denaro made clear that it would be instrumental in obtaining such listings: for 

example, in a February 9, 2018 post on Bitcointalk, Denaro explained that the DNO token “will be 

listed on as many major exchanges as we can get it listed on.” (emphasis added). 

47. On March 10, 2018, Denaro announced to investors in an email that it had 

confirmed its first “exchange listing” with the digital asset platform Yobit, and also noted that 

Denaro “will start adding new exchanges [sic] few days after ICO ends.” 

48. Denaro suggested to investors that the price of the DNO Token would appreciate, 

with posts on its Twitter feed and Facebook page including emoji symbols of rockets taking off and 

a chart with an upward trajectory, signifying that purchasers could expect profits. 

49. On March 12, 2018—just days before the end of the public ICO period—Denaro 

posted its last tweet from its Twitter account. 

50. At the end of the ICO period on March 16, 2018, investors had not received their 

DNO Tokens and the Denaro platform—including, for example, a debit card and Denaro 

applications for iOS and Android—had not been developed as promised. 

51. Investors also found that they were unable to retrieve their original digital asset 

investment or withdraw the digital assets they had contributed to their Denaro wallets.   

52. On or around March 19, 2018, Denaro withdrew the administrators for its Telegram 

and Facebook groups. 

53. On or around March 23, 2018, Denaro’s website was taken down and no further 

updates were provided to the Denaro community. 

54. In connection with the Denaro scheme, Auzins made numerous misrepresentations 

to investors and potential investors concerning the company; the use and safety of their investments; 

and the team behind the offering. Auzins, as the driving individual behind the offering and the only 

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person associated with the company, knew or recklessly disregarded that these representations were 

false or misleading. 

55. 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. 

56. Auzins also misrepresented the development and current status of the Denaro 

platform at the time of the offering. All of the claimed products or services being offered were 

fictitious.   

57. Denaro’s website and marketing materials emphasized the advanced nature of its 

digital asset wallet, which offered “IP-address protection, two-factor SMS authentication and two-

factor email authentication,” thereby providing “[u]nprecedented levels of security and protection.” 

An online video evaluating the Denaro offering for potential ICO participants specifically 

highlighted the wallet as the primary reason to invest, emphasizing that Denaro already had a 

“[r]eadied and tested product.” Denaro, in fact, never developed a digital asset wallet.   

58. On January 31, 2018, Denaro stated in online forums that it “already ha[d] signed 

contracts with a [debit] card vendor. They will provide us with MasterCard debit cards.” The Denaro 

Whitepaper even contained an image of a “Denaro Debit Card” with the MasterCard logo. On 

February 25, the company claimed the Denaro Debit Cards supported worldwide ATM 

functionality. In fact, the debit cards were fictitious and Denaro never had any relationship with 

MasterCard.   

59. Denaro’s debit card development was important to investors when they were 

considering participating in the offering. 

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60. Auzins also misled investors regarding the team behind the ICO. Marketing materials 

for Denaro highlighted fictitious team members. The purported chief executive officer and co-

founder was identified on the website and in the Denaro Whitepaper as “Ron Ramsey,” an executive 

with a “proven track record” who had previously worked as the “Economic Development Director 

at London Computer Systems” where he was “actively following and researching blockchain 

technology and the cryptocurrency movement that was occurring.”   

61. Ramsey was not a real person. The photos of Ramsey used in Denaro’s offering 

materials and public interviews were taken from the social media pages of a Turkish film director.  

London Computer Systems never employed an individual named Ron Ramsey and the company 

never had a title in its organization of “Economic Development Director.” 

62. The purported chief financial officer and other co-founder was Jeremy Boker, who 

purportedly completed a “Bachelor’s in Business at Kentucky State University” and obtained his 

“Master’s in IT at London Metropolitan University.”   

63. Boker also was not a reason person.  No individual with the name “Jeremy Boker” 

ever attended Kentucky State University and the photo of “Boker” used in Denaro’s marketing 

materials can be found on a stock photography site under “Elegant Male Portrait.” 

64. At least 25 U.S. investors participated in the Denaro offering. 

65. According to its website, Denaro raised more than $11 million in Bitcoin, Ethereum, 

Litecoin, and U.S. dollars from thousands of investors. 

66. Auzins misappropriated all of the ICO proceeds when he disappeared with the 

invested funds and ignored demands from investors to return their money. 

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II. THE INNOVAMINE CLOUD MINING SCHEME 

A. Background on Digital Asset Mining 

67. A blockchain, such as bitcoin, consists of a series of computer nodes run by people 

or organizations, known as “miners”.  

68. New unconfirmed transactions that are sent to the blockchain are collected together 

into blocks by miners. 

69. Miners compete with each other to be the first to solve a complex mathematical 

problem, known as “proof of work’ – the winner then adds their block with their collection of 

transactions to the existing blockchain.  

70. Blocks are interconnected using a “hash” function. A hash is a mathematical 

“summary” of a set of data – changing any part of that data results in a significant change to the 

hash value, which makes it a very effective way of detecting changes in any set of data. By including 

the hash of the previous block in the next block it becomes extremely hard to make changes to the 

stored data. 

71.  Calculating these hashes can be made arbitrarily hard by requiring that the hash 

created starts with a particular character sequence. Solving this problem for a large valuable network 

like bitcoin requires huge computing resources, and significant technical knowledge. 

72. Miners often combine their computing power into a so-called “mining pool” which 

increases the probability of winning the right to mine the next block, but reduces that payout per 

miner. 

73. Within a mining pool, individual miners receive a percentage of each win according 

to the relative amount of computer power they provide.  

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74. Traditionally miners owned and ran their own hardware, but now it is possible to 

rent the use of the hardware from third parties, who provide “proof of work” mining as a “cloud 

service” where the user pays to use the hardware or service. 

75. Cloud mining can dramatically reduce the cost and complexity of becoming a miner, 

but the rewards are lower because they are split among the cloud miners. 

76. The mining hardware is located in a datacenter, which may be in a different location 

from the person or organization operating the hardware. 

77. In certain mining operations, investors can purchase participation interests or shares 

in the mining operation.   

B. The Innovamine Offering 

78. In April 2019, Auzins published a website—innovamine.io—that purported to offer 

a cloud mining and digital asset trading platform.  The administrative contact for Innovamine listed 

on its website was listed as Daniel Gaines, CEO of the related entity Innovatrade PTY LTD, who 

claimed to be based in Sydney, Australia. 

79. Daniel Gaines, in fact, was a pseudonym for Auzins, who was ultimately responsible 

for all aspects of the Innovamine scheme, including creation of the company’s website and 

marketing materials, as well as communicating with investors. 

80. Auzins publicly promoted Innovamine on social media platforms such as Facebook 

and Twitter and on websites touting new digital asset offerings. 

81. In an April 2019 press release, Innovamine described itself as a “state-of-the-art 

cloud mining service” that allowed users to “purchase all the hash power they would need to mine 

cryptocurrency.”  

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82. Innovamine initially purported to offer cloud mining for three cryptocurrencies—

bitcoin, ethereum, and litecoin—but in mid-July 2019 claimed on its Twitter feed to have added 

mining for Bitcoin Cash, ZCash, and DASH to its options. 

83. Innovamine investors signed up for a two-year contract that purportedly included 

mining of the digital asset of their choice and claimed to provide on a daily basis an “automatic 

payout . . . in whichever coin they mine”; so-called “maintenance fees” were included as part of the 

agreement.  

84. The company claimed in a press release on April 9, 2019 to “have algorithms in place 

to ensure that miners are allocated the fastest, most efficient [mining] pools.”  

85. Innovamine also purported to offer trading in the same digital assets available for 

mining.  

86. Innovamine promised investors in the April 9, 2019 press release that it would 

provide the equipment and personnel necessary to perform the mining; as a result, users could “do 

all this [mining] without the hassle of intricate software installation or buying expensive hardware” 

and then passively receive the returns generated by the company’s mining operation.   

87. Innovamine highlighted its state-of-the-art mining facilities on the website and in a 

marketing video, and emphasized the experience of its employees to potential investors. Innovamine 

claimed on its website, for example, that its “team members are mining experts from a vast array of 

scientific backgrounds.”  

88. On Twitter and in communications with investors in July 2019, Innovamine claimed 

that it had been “recognized as number one in the mining industry” and that it was “the top 

performing mining company in the globe” and “the top mining company across the world.” 

89. In the April 9, 2019 press release, Innovamine guaranteed profits for its mining 

investors. As the company explained, all revenues from trading commissions were to be 

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“channel[ed] . . . to the users [sic] mining profits . . . . And here is why, the goal is to make you earn 

one way or another.” This approach thereby allowed Innovamine to “keep . . . the wheel of success 

spinning for our users” and ensure that its investors “experience profit irregardless [sic] of the 

mining result.”   

90. A marketing email on July 11, 2019 from Innovamine similarly claimed that the 

“InnovaMine platform is wired to help users get more for their investments. . . . We are all about 

helping you get more for your money. Take action now and seize this opportunity!”   

91. The Innovamine website also contained a “Profit Calculator” that showed—

depending on the digital asset being mined—the user’s hashrate, as well as the expected daily, 

monthly, yearly, and 2-year profit in their account. 

92. Early investors were initially able to withdraw funds from their accounts – 

purportedly representing mining profits – and verification of these withdrawals were publicly posted 

on Telegram and Bitcointalk. 

93. In early July 2019, Innovamine announced the launch of the “Innovamine 

Mastercard” debit card that would purportedly allow digital asset withdrawals at ATMs around the 

world. 

94. A July 12, 2019, email to investors from Innovamine also promised a digital asset 

“exchange platform” for its investors. 

95. On July 15, 2019, Auzins abandoned the Innovamine website and various social 

media accounts associated with the scheme, stopped responding to investor messages, and deleted 

the Telegram chat group where investors and potential investors had communicated with the 

company.   

96. Investors who had contributed to Innovamine were subsequently unable to withdraw 

any funds. 

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97. The representations made by Auzins concerning Innovamine were entirely false. As 

the driving individual behind the offering and the only person associated with the company, Auzins, 

knew or recklessly disregarded that the representations were false or misleading because there were 

no actual mining operations. 

98. Auzins registered a fictitious legal entity—Innovatrade PTY LTD—with the 

Australian Securities and Investments Commission (“ASIC”), when in fact this legal entity did not 

represent an actual business. 

99. In the April 9, 2021 press release, Innovamine specifically touted this regulatory 

registration in an effort to reassure investors, stating that: “You should not be worried about 

Innovamine’s credibility, as the company is regulated by [ASIC].” 

100. All of the claimed mining services being offered through Innovamine were fictitious. 

There was no “team of mining experts” with a “vast array of scientific backgrounds” responsible for 

overseeing the company’s mining operations; it was only Auzins. Indeed, when an investor emailed 

Innovamine on June 28, 2019 and asked to visit Innovamine’s facilities in Australia—where the 

company claimed to be located on its website—so that he could verify for himself the mining 

arrangement, Innovamine responded the following day that “[o]ur mining facilities are in Ukraine” 

and the investor was unable to visit the purported mining operation.   

101. Innovamine was never “recognized as number one in the mining industry” by any 

person or entity nor was it the “top performing mining company in the globe”—again, because the 

company in fact had no actual mining operations. 

102. A report by the Australian Competition & Consumer Commission—an entity that 

collects information regarding purported scams based in that country—stated that losses reported 

by Innovamine victims totaled more than $7 million. 

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103. At least six investors based in the United States invested in Innovamine, with losses 

totaling more than $50,000. 

IV. AUZINS’ NUMEROUS ADDITIONAL FRAUDULENT SCHEMES3 

104. To date the Commission has identified numerous other fraudulent schemes 

perpetrated by Auzins. 

105. Similar to the Denaro ICO scheme, starting in December 2017, Auzins fraudulently 

promoted an unregistered coin offering for Bitroad Limited, a U.K. entity registered with the U.K. 

Companies House. 

106. Like the Denaro ICO, Auzins publicly promoted the Bitroad ICO through social 

media posts as well as on a public chat group on the Telegram application. Bitroad also released a 

whitepaper available on Bitroad’s website and through various internet platforms promoting the 

Bitroad ICO, including Bitcointalk. 

107. Auzins’ false statements in connection with Bitroad included that Bitroad had 

different types of wallets (desktop, web-based, and mobile) to store user’s digital assets as well as a 

debit card that could be used “anytime all over the world.” In fact, Bitroad wallets and debit card did 

not exist. Auzins also falsely named Bitroad’s core team members who would be responsible for 

developing the project including CEO Noel Mills, a finance manager, marketing experts, and 

technical developers. There was no person named Noel Mills associated with Bitroad.  Bitroad had 

no finance manager, marketing experts, or technical developers.  The only person associated with 

Bitroad was Auzins. 

                                                 
3 While the Commission does not presently assert independent claims against Auzins based on the 
additional fraudulent schemes described in this section of the Complaint, these schemes are both 
relevant to demonstrate Auzins’ scienter in the charged frauds as well as to the ultimate 
determination of the appropriate relief should Auzins be found liable. 
 

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108. On December 28, 2017, Bitroad posted its last message on Bitcointalk, one of the 

primary avenues that Bitroad had used to communicate with the public. The following day, Bitroad 

posted the last tweet from its Twitter account.   

109. According its public statements on Bitcointalk, Bitroad raised more than $3 million 

in bitcoin and ethereum from investors. 

110. On April 12, 2018, the Companies House dissolved Bitroad for “non-compliance for 

failing to file statutory documents.” 

111. Separately, on January 17, 2019, Auzins published a website—gemneon.io—that 

claimed to be a digital asset investment and trading platform.  

112. “Michael Schultz”—a pseudonym for Auzins—was identified on the website as the 

CEO of Gemneon.   

113. Auzins was ultimately responsible for all aspects of the Gemneon scheme, including 

creation of the website and marketing materials and communicating with investors.   

114. According to its website and a whitepaper posted on the site (the “Gemneon 

Whitepaper”), Gemneon offered a digital asset-related investment program that “help[s] people . . . 

make profitable investments in the cryptocurrency market.” Although the company provided few 

details regarding the program, the general concept was that investors contributed digital assets to 

Gemneon and the company made digital asset-related trades on their behalf.   

115. Gemneon offered three different investment plans that promised specified daily 

returns depending on the amount of money invested. According to the Gemneon website, an 

investor’s principal could be withdrawn after 50 days. 

116. Gemneon promised profits to investors in its program. In addition to daily returns 

guaranteed by each investment plan, the company explained on its website that “[o]nce the platform 

comes online, all investors will be able to trade their money through our platform, not to mention 

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start making a handsome profit.” The Gemneon Whitepaper and website claimed that “[i]nvestors 

make money off the price fluctuation that crypto currencies are so famous for having.” The website 

and Whitepaper also noted that “the more money you invest the more you can expect to make.”    

117. In February 2019—prior to the specified withdrawal date that would have allowed 

investors to take out their principal—Auzins abandoned the Gemneon website, stopped responding 

to investor messages, and deleted the Telegram chat group where investors and potential investors 

had been communicating with the company.   

118. Auzins made numerous misrepresentations in connection with the Gemneon 

scheme. Auzins, who directed all activities relating to Gemneon, knew these representations were 

false or misleading, including (1) registering a fictitious legal entity—Gem Investments Limited—

with the Hong Kong Companies Registry and touting its Hong Kong registration to reassure 

investors; and (2) falsely claiming to have a “large team of seasoned traders and investors[, which] 

almost guarantees that the investment will turn a profit as we put that money through multiple 

crypto trades.” Gemneon did not have any trading program, and there was no “team” of traders 

responsible for overseeing the company’s trading operations. Auzins was the sole individual behind 

Gemneon.   

119. The total amount received in the Gemneon scheme is unknown.  

120. When Auzins abandoned the Gemneon website in February 2019, investors who had 

contributed digital assets to Gemneon for trading and investment were no longer able to access their 

accounts and were unable to withdraw any funds.  

121. Auzins misappropriated the Gemneon funds when he disappeared with nearly all of 

the digital assets that had been sent to his wallets in connection with the offering.  

122. Auzins also published four additional webpages purporting to offer a digital asset 

investment platform similar to Gemneon:  (1) bankroi.io (“BankRoi”); (2) impressio.io 

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(“Impressio”); (3) changepro.io (“ChangePro”); and (4) lycovest.io (“Lycovest”) (collectively, the 

“Investment Plan Websites”). The Investment Plan Websites were generally promoted on social 

media platforms as well as Bitcointalk and other websites. 

123. The Investment Plan Websites offered the same basic investment scheme as 

Gemneon. Investors were encouraged to transfer digital assets to private wallets maintained by the 

offering entity. The Investment Plan Websites claimed that these digital assets would be invested 

using proprietary trading methods and that users would receive a guaranteed, exorbitant rate of 

return based on the extraordinary profits earned by the experienced team behind each offering.   

124. Portions of each website were frequently recycled in later schemes: the BankRoi site 

copied extensively from Impressio, for example, while the ChangePro, Gemneon, and Lycovest 

webpages contained numerous similarities.  

125. All of the Investment Plan Websites claimed that investors’ principal could be 

withdrawn after a specified period. At a certain point prior to that specified date, however, Auzins 

abandoned the website and the various social media accounts associated with each scheme, stopped 

responding to investor messages, and deleted the Telegram chat groups where investors and 

potential investors had been communicating with the company. Investors who had contributed to 

these websites were subsequently unable to withdraw any funds.4   

                                                 
4 In addition to the schemes discussed above, Auzins also created the following 24 investment 
schemes and websites, many of which have also been publicly alleged to be frauds: bitwest.biz (Bit 
West Limited); bitfine.biz (Bitfine Limited); coinstreamlimited.com and fundstream.biz (Coinstream 
Ltd); forksmine.biz (Forks Mining Ltd.); bitgrow.biz (Bitgrow Investments Limited); bithonest.ltd 
(Bithonest Ltd.); bitone.io (Bitone Financial LP); bithorn.io (Bithorn Limited); ultraminers.biz 
(Ultrafarm Ltd.); 15bit.biz (Bitcoin Miners 15 LTD); cryptoinfinity.net (CryptoInfinity Limited); 
bitstorm.biz (Bitstorm Limited); theminers.biz (Miners Team Limited); prefex.net (PREFEX 
Investments Online Limited); 8dailycoin.com (Daily Coins INV Ltd.); cryptonium.biz (Cryptonium 
Limited); bitexcon.com (Bitex Limited); bitmach.net (Bitmach Limited); 10bit.biz (TEN Bitcoins 
Limited); coinscrypt.net (CoinsCrypt LTD); skyminerz.biz (Sky Mine LTD); bitday.biz (Bitday 
Limited); cryptoshare.biz (Cryptocom.Limited); and mbitco.com (Mbitco Limited). 

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V. THE DIGITAL ASSETS WERE OFFERED AND SOLD AS SECURITIES 

126. The digital assets offered and sold by Auzins in the Denaro and Innovamine 

schemes (as well as in the other six schemes described in Section IV above) were offered and sold to 

potential investors as an investment of money in a common enterprise with a reasonable expectation 

of profits to be generated from the efforts of the issuers and, as such, were “investment contracts” 

and, therefore, “securities” within the meaning of Section 2(a)(1) of the Securities Act [15 U.S.C. 

§ 77b(a)(1)] and Section 3(a)(10) of the Exchange Act [15 U.S.C. § 78c(a)(10)]. 

127. With respect to Denaro, the company’s statements made clear that the DNO tokens 

were investments from which investors could reasonably expect future profits:  (1) the Denaro white 

paper, emails to investors, and other public statements specifically referred to the ICO participants 

as “investors”; (2) in public forum posts, Denaro emphasized that DNO token holders “could sell 

the token for fiat or other cryptocurrencies”; (3) the Denaro Whitepaper, emails, and public posts 

highlighted the availability of a secondary market for DNO tokens; and (4) Denaro’s social media 

posts suggested that DNO tokens’ price would appreciate.   

128. With respect to Denaro, the company’s statements made clear that this was a 

common enterprise.   

129. As explained in the Denaro Whitepaper, all proceeds from the offering were 

intended to be collected and held by the company; the dividend-type payment would distribute its 

network transaction fees among existing token DNO token holders; and the fortunes of the 

investors would rise and fall together based on the value of token they were purchasing.  As such, 

there was horizontal commonality between the DNO token holders. 

130. Denaro’s retention of more than a quarter of the total tokens from the ICO for itself 

and its advisors meant that the company’s fortunes would rise and fall with those of the investors.  

As such, there was vertical commonality between the company and the investors. 

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131. Investors reasonably expected to profit from appreciation in the DNO token, both 

from appreciation in the value of the token and through the dividend-type distributions promised by 

the company. 

132. Moreover, the profits were expected to be generated through the efforts of Denaro. 

DNO tokens were sold before people could conduct transactions with DNO tokens (requiring 

reliance on the founders’ managerial efforts) and funds raised would purportedly be used by Denaro 

management to build and develop ecosystem for DNO tokens, which included: (1) finalizing debit 

cards; (2) finalizing a bank partnership enabling Denaro to receive international transactions in fiat; 

and (3) developing Denaro apps for the iOS and Android operating systems. 

133. With respect to Innovamine, investors reasonably believed that they would make 

money from participating in the mining pool and Innovamine promised its mining investors profits 

on the funds they invested “regardless of the mining result.” 

134. Likewise, statements from the company also made clear that the expected profits 

would be generated through the efforts of Innovamine management. Innovamine emphasized to 

investors how easy and effortless Innovamine and its experienced team made mining for digital 

assets. Once purchasers invested in their desired digital asset pool, investors engaged in no further 

actions. Instead, all purported mining would occur as a result of Innovamine’s efforts. Innovamine 

was entirely responsible for the equipment purchase, operation, and maintenance of the purported 

mining operation. Innovamine controlled the payout to investors. Indeed, Innovamine’s 

representations that it was a “top performing” manager with regard to the above undertakings are 

the reason why an investor would choose to invest in Innovamine’s mining contracts rather than 

invest in their own mining equipment and operation. 

135. Innovamine was a common enterprise. 

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136. Digital assets contributed by Innovamine investors were purportedly pooled together 

and used by Innovamine to purchase mining hardware, thereby creating economies of scale that 

would allow Innovamine to achieve greater hashing power in the collective mining operation than 

had the investors had tried to mine individually.  Mining returns generated by these pools would 

purportedly be shared by Innovamine with investors on a pro-rata basis.  The fortunes of the 

Innovamine investors were, thus, directly correlated, demonstrating horizontal commonality. 

FIRST CLAIM FOR RELIEF 

Violations of Securities Act Section 17(a) 
 

137. The Commission realleges and incorporates by reference here the allegations in 

paragraphs 1 through 136.   

138. Defendant, directly or indirectly, singly or in concert, in the offer or sale of securities 

and by the use of the means or instruments of transportation or communication in interstate 

commerce or the mails, (1) knowingly or recklessly employed one or more devices, schemes or 

artifices to defraud, (2) knowingly, recklessly, or negligently obtained money or property by means 

of one or more untrue statements of a material fact or omissions of a material fact necessary in order 

to make the statements made, in light of the circumstances under which they were made, not 

misleading, and/or (3) knowingly, recklessly, or negligently engaged in one or more transactions, 

practices, or courses of business which operated or would operate as a fraud or deceit upon the 

purchaser. 

139. By reason of the foregoing, Defendant, directly or indirectly, singly or in concert, has 

violated and, unless enjoined, will again violate Securities Act Section 17(a) [15 U.S.C. § 77q(a)]. 

  

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SECOND CLAIM FOR RELIEF 
 

Violations of Exchange Act Section 10(b) and Rule 10b-5 Thereunder 
 

140. The Commission realleges and incorporates by reference here the allegations in 

paragraphs 1 through 136. 

141. Defendant, directly or indirectly, singly or in concert, in connection with the 

purchase or sale of securities and by the use of means or instrumentalities of interstate commerce, or 

the mails, or the facilities of a national securities exchange, knowingly or recklessly (i) employed one 

or more devices, schemes, or artifices to defraud, (ii) made one or more untrue statements of a 

material fact or omitted to state one or more material facts necessary in order to make the 

statements made, in light of the circumstances under which they were made, not misleading, and/or 

(iii) engaged in one or more acts, practices, or courses of business which operated or would operate 

as a fraud or deceit upon other persons. 

142. By reason of the foregoing, Defendant, directly or indirectly, singly or in concert, has 

violated and, unless enjoined, will again violate Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] and 

Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. 

THIRD CLAIM FOR RELIEF 
 

Violations of Securities Act Sections 5(a) and (c) 
 

143. The Commission realleges and incorporates by reference here the allegations in 

paragraphs 1 through 136. 

144. Defendant directly or indirectly, singly or in concert, (i) made use of means or 

instruments of transportation or communication in interstate commerce or of the mails to sell, 

through the use or medium of a prospectus or otherwise, securities as to which no registration 

statement was in effect; (ii) for the purpose of sale or for delivery after sale, carried or caused to be 

carried through the mails or in interstate commerce, by any means or instruments of transportation, 

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securities as to which no registration statement was in effect; or (iii) made use of means or 

instruments of transportation or communication in interstate commerce or of the mails to offer to 

sell or offer to buy, through the use or medium of a prospectus or otherwise, securities as to which 

no registration statement had been filed. 

145. By reason of the foregoing, Defendant violated and, unless enjoined, will again 

violate, Securities Act Sections 5(a) and 5(c) [15 U.S.C. §§ 77e(a) and 77e(c)]. 

PRAYER FOR RELIEF 

 WHEREFORE, the Commission respectfully requests that the Court enter a Final 

Judgment: 

I. 

Permanently enjoining Auzins and his agents, servants, employees, and attorneys and all 

persons in active concert or participation with any of them from violating, directly or indirectly, 

Securities Act Sections 5(a) and (c) and 17(a) [15 U.S.C. §§ 77e(a), 77e(c), and 77q(a)] and Exchange 

Act Section 10(b) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. 

II. 

Ordering Defendants to disgorge with prejudgment interest all ill-gotten gains from the 

conduct alleged in this Complaint pursuant to Section 21(d)(3), (5), and (7) of the Exchange Act [15 

U.S.C. §§ 78u(d)(3), 78u(d)(5), and 78u(d)(7)];   

III. 

Ordering Auzins to pay civil monetary penalties under Securities Act Section 20(d) 

[15 U.S.C. § 77t(d)] and Exchange Act Section 21(d)(3) [15 U.S.C. § 78u(d)(3)]; 

  

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IV. 

Permanently prohibiting Auzins from serving as an officer or director of any company that 

has a class of securities registered under Exchange Act Section 12 [15 U.S.C. § 78l] or that is 

required to file reports under Exchange Act Section 15(d) [15 U.S.C. § 78o(d)], pursuant to 

Securities Act Section 20(e) [15 U.S.C. § 77t(e)] and Exchange Act Section 21(d)(2) [15 U.S.C. 

§ 78u(d)(2)]; 

V. 

Permanently enjoining Auzins from participating, directly or indirectly, in any offering of a 

digital asset security; provided, however, that such injunction shall not prevent Auzins from 

purchasing or selling digital asset securities for his own personal accounts; and  

VI. 

Granting any other and further relief this Court may deem just and proper. 

 
Dated: New York, New York 

December 2, 2021 

 /s/ Richard R. Best     
RICHARD R. BEST 
REGIONAL DIRECTOR 
KRISTINA LITTMAN 
CHIEF, CYBER UNIT 
Lara S. Mehraban 
John O. Enright 
Thomas P. Smith, Jr. 
Todd D. Brody 
Jon A. Daniels 
Attorneys for Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 
New York Regional Office 
Brookfield Place  
200 Vesey Street, Suite 400 
New York, New York 10281-1022 
(212) 336-0080 (Brody) 
[email protected] 
  

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