Kent Swig, a Manhattan real estate agent, took an unexpected turn in his career last year. The 61-year-old executive who built a commercial real estate empire in Manhattan that collapsed during the Great Recession has launched a cryptocurrency backed by billions of dollars in gold. But things did not go well for the altcoin. Looking at the latest developments, the US Securities and Exchange Commission (SEC) seems to have focused on the altcoin.
SEC rolled up its sleeves for this altcoin
Kent Swig named the coin Digau, with a play on gold’s base symbol AU and the excavation they plan to do. But behind the Quixote-like enterprise was a dark network of business associates who were far less attractive than Swig, including two men convicted of felony crimes in the past. The state of Nevada also accused one of these men, Gary Wayne Walters, of trying to raise millions of dollars from investors for a fake COVID-19 cure early in the pandemic.
A Securities and Exchange Commission (SEC) civil suit, filed Sept. 30 in the Southern District of Florida, now widens the circle of disrepute surrounding cryptocurrency, which Swig is promoting as a safer alternative in the volatile world of cryptocurrency. The federal lawsuit names Stephen Braverman, Swig’s partner and managing director of the company that bids Digau, as the perpetrator of a “pump&dump” scheme involving another cryptocurrency with striking similarities to Swig’s token.
Different coins were also involved
Prior to joining Digau, Braverman was one of the creators of a different coin called Dig, allegedly backed by gold, according to the SEC lawsuit. Backers of Dig, including Braverman and three others accused in the case, sold $36.8 million in coins to retail investors before their value plummeted in 2019. The SEC is trying to compel Braverman and three other defendants to repay victims of fraud allegations, along with interest and other financial penalties. In addition, project managers face a lifetime ban from acting as a company officer or director.
A spokesperson for Swig stated that Braverman “vigorously defended himself against these baseless allegations.” He said his legal counsel wanted the case dismissed. Braverman was said to be the chief operating officer of one of the two companies the regulator targeted in the complaint, according to the SEC. Swig’s spokesperson claimed that Braverman had no formal affiliation with that company.
Digau had peaked as high as $4.01 per token during its good times. But last month it fell by as much as 6 cents. When Swig’s company announced Digau, cryptocurrencies were in pretty good shape. On the other hand, the coin is thought to have something to do with Dignity Gold. Dignity Gold, also a gold-based coin project, has secured mining rights on 80 acres of land, which it said in a press release in April 2022, said geological surveys show “gold, silver, platinum and rare earths” at a “combined valuation of over $214 billion.” claimed to have taken it.
Mining risk
Such extraordinary claims should be viewed with skepticism, especially in the American west, where miners have been scouring for precious metal reserves for more than a century, mining experts said. Mining in the US often consists of managing costly logistical arrangements, rather than an abundance of wealth. “Everyone thinks they can mine until they realize they can’t,” said Carl Nesbitt, an Associate Professor of Mining and Metallurgical Engineering at the University of Nevada, for example. “There is a lot of regulation, complex engineering and geological work, and the enormous costs of extraction. It is very risky,” he said.
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