SEC Charges Bitcoin Latinum Founder with $16 Million Fraud Scheme

Federal regulators have filed charges against Donald G. Basile, founder of Bitcoin Latinum, alleging he orchestrated a fraudulent cryptocurrency offering that bilked investors out of $16 million while making false claims about insurance coverage and asset backing.

The U.S. Securities and Exchange Commission filed the complaint on April 17, 2026, in the Eastern District of New York, targeting Basile and his two companies, GIBF GP, Inc. and Monsoon Blockchain Corporation, for securities fraud violations dating back to 2020.

According to the SEC, Basile and his companies sold Simple Agreements for Future Tokens (SAFTs) to hundreds of American investors, promising them future rights to a cryptocurrency called Bitcoin Latinum, or LTNM. The complaint alleges these sales were built on a foundation of misrepresentations designed to attract investors with false claims of security and legitimacy.

“Basile repeatedly assured potential investors that LTNM was ‘the world’s first insured digital asset’ with coverage reaching ‘up to $1 billion,'” the SEC stated in court documents. Investigators found no evidence that any insurance company ever issued such a policy for the tokens or any aspect of the SAFT offering, making these representations materially false.

The deception reportedly extended beyond insurance claims. Basile allegedly marketed LTNM as an “asset-backed cryptocurrency” secured by an “existing trust” that would protect investor value. Regulators assert no such trust or asset pool was ever established, further misleading investors about the fundamental nature of their investment.

Perhaps most egregiously, the SEC claims Basile diverted millions in investor funds toward personal expenses rather than supporting the cryptocurrency’s development or value as promised. While investors were told that at least 80% of proceeds would be “used to support the underlying value” of LTNM or directed “into an underlying fund,” significant portions allegedly went toward Basile’s real estate purchases, credit card payments, and even a $160,000 horse.

The timing of these charges comes amid increased regulatory scrutiny of the cryptocurrency market, where the SEC has been aggressively pursuing cases of fraud and securities violations. The agency has repeatedly warned investors about risks in crypto markets, particularly around token offerings that promise high returns or special features without adequate disclosure.

For investors who put money into Bitcoin Latinum, the outcome proved disastrous. The token eventually became worthless, causing substantial losses across the investor base that had been drawn to the project’s seemingly sophisticated backing and insurance guarantees.

The legal charges include violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934, along with Rule 10b-5 – core anti-fraud provisions in federal securities law. GIBF and Monsoon face specific charges under Section 17(a)(2), while Basile is additionally charged with aiding and abetting the companies’ violations.

Seeking to make investors whole and prevent future misconduct, the SEC is pursuing multiple remedies in its case. These include permanent injunctive relief against all defendants, disgorgement of ill-gotten gains with prejudgment interest, and civil penalties. The regulator is also seeking a conduct-based injunction that would prohibit the defendants from engaging in future securities activities.

The SEC has specifically requested an officer-and-director bar against Basile, which would prevent him from serving in leadership positions at publicly traded companies – a significant career limitation that reflects the seriousness of the allegations.

The litigation is being managed by the SEC’s New York Regional Office under the supervision of Jack Kaufman, with attorneys Brockett, Flath, and Rodriguez leading the case.

As this case proceeds through the courts, it serves as a stark reminder of persistent fraud risks in cryptocurrency markets despite the industry’s efforts to mature and attract mainstream adoption.