Prosecutors File Trial Memorandum Detailing Allegations in Crypto Pump and Dump Case Against Tyler Marx

On Monday, July 8, 2024, the United States government filed a trial memorandum in preparation for the upcoming trial of Tyler Marx. Marx is facing charges related to his involvement in an alleged cryptocurrency “pump and dump” scheme.

The memorandum provides background on the charges against Marx. He is accused of conspiring with his friend Tanner Roughton to artificially inflate the value of two cryptocurrencies, 1Credit (1CR) and Belacoin, between 2016 and 2018. The plan was to promote the coins on online forums and drive up their price, at which point Marx and Roughton would sell their holdings at a profit. This practice, known as a “pump and dump” scheme, is considered securities fraud.

The memorandum details how Marx first got involved in the cryptocurrency market while in high school in Virginia Beach. In 2016, he allegedly contacted the developer of the moribund coin 1CR with a proposal to create an arcade game that used the currency. Marx and Roughton then began aggressively promoting 1CR across social media, forums, and the Poloniex exchange chatroom. Through false statements about upcoming releases and developments, they managed to increase 1CR’s price from near-zero to almost $8, allowing them to profit over $150,000 according to records.

However, once the game was released and 1CR’s lack of real utility was exposed, its value collapsed rapidly. Undaunted, Marx then turned his attention to another low-value coin called Belacoin. This time, his promotion was even more sophisticated – he launched an Instagram-like app called Belacam that used Belacoin for its payments. Between late 2016 to mid-2017, Marx and Roughton’s promotional efforts and alleged manipulative trades drove Belacoin’s price up over 7,300%.

The memorandum also provides details on the four wire fraud charges levied against Marx. These relate specifically to Belacoin trades that Marx executed with victims located in the Eastern District of Pennsylvania in January and May 2017.

The trial is scheduled to begin on July 23rd in the US District Court for the Eastern District of Pennsylvania. Through witness testimony, trading records, online posts, and summary exhibits, the government will aim to prove Marx deliberately misled investors for his own financial gain.

Please contact BlockTribune for access to a copy of this filing.