$140M Crypto Ponzi Uncovered in New York Lawsuit

New York prosecutors have filed a civil lawsuit against Peter McInnes, a British investor accused of orchestrating a crypto-based Ponzi scheme that defrauded investors out of more than $140 million. Operating under the names TradeAI and Stakx, McInnes allegedly promised outsized returns powered by AI-driven crypto trading algorithms.

According to the complaint, victims were drawn in by marketing material that promoted consistent high-yield returns. Investigators state that new investor funds were used to pay earlier participants, a hallmark of traditional Ponzi schemes.

The alleged operation targeted both institutional and retail investors, with many located across the United States, the United Kingdom, and parts of Southeast Asia. Prosecutors also cited the use of forged documents, fabricated audit trails, and manipulated investment dashboards to mask fraudulent activity.

The U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) are working together on the investigation. While McInnes has denied all allegations, authorities have already frozen multiple accounts connected to the scheme.

This case joins a growing number of crypto-related fraud investigations, reinforcing the critical importance of due diligence among investors. Regulators are urging stronger compliance measures, particularly targeting unregistered investment vehicles that exploit gaps in digital asset oversight.

Although crypto adoption has expanded rapidly, cases like this highlight the need for stronger safeguards. The risk in crypto markets goes beyond short-term volatility, extending into the underlying operational and structural vulnerabilities of the sector.