Gemcoin founder Steve Chen was sentenced Monday to 10 years in federal prison for defrauding tens of thousands of investors in one of the largest and earliest cryptocurrency investment schemes.
Chen, 63, admitted last February to running U.S. Fine Investment Arts (USFIA) and peddling $147 million in "gem coins" (crypto purportedly backed by gems) to over 70,000 investors from 2013 through 2015. Prosecutors have described USFIA as a Ponzi scheme and a multi-level marketing scheme.
His guilty plea on one count of tax evasion and one count of conspiracy to commit wire fraud carried a mandatory minimum 10-year sentence. Judge John F. Walter additionally ordered Chen to pay the IRS $1,885,094 in back taxes.
Chen's sentencing is wrapped up but his case is far from over. The judge scheduled a restitution hearing for July to discuss making Chen's victim investors whole.