$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 of over $140 million. Operating under the names TradeAI and Stakx, McInnes allegedly promised returns generated by AI-driven crypto trading algorithms.

Victims were lured in with marketing material boasting consistent high-yield returns. Investigators say new investor funds were used to pay earlier participants—a classic hallmark of Ponzi fraud.

According to the lawsuit, the scheme targeted both institutional and retail investors, many of whom were located in the United States, the UK, and parts of Southeast Asia. Prosecutors cited forged documents, fake audit trails, and manipulated dashboards as part of the operation.

The U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) are reportedly collaborating on the investigation. While McInnes has denied all allegations, authorities have frozen multiple accounts linked to the operation.

This case adds to a growing list of fraud investigations within the crypto space, further emphasizing the importance of due diligence for investors. Regulatory bodies continue to push for tighter controls, especially around unregistered investment schemes that leverage crypto’s opacity.

Although crypto adoption has surged, cases like these serve as stark reminders that risk in the sector goes beyond price volatility—it extends into the operational and structural integrity of market participants.