CEO of porn cryptocurrency allegedly disappears with investor money

The cryptocurrency can be used to pay for viewing live-streaming porn. Photo / 123RF

The CEO of a cryptocurrency made for live-streaming porn has reportedly disappeared with his investors' money.

Four investors of Fantasy Market have claimed the creator of the digital currency – Jonathan Lucas – has failed to repay their investment despite multiple requests, the Daily Mail wrote.

"Jonathan Lucas (most likely alias) has scammed us and run off with the cryptocurrency," one angry investor told the newspaper.

In his investment plan, Lucas claimed he was attempting to raise up to US$25 million ($34.8m).

Fantasy Money tokens, or FMtokens, could be used to pay for viewing live-streaming porn, it said.

It's not known how much money Lucas actually raised.

In private chats, he boasted that he'd raised around US$4.4m ($6.1m) in September last year, although he later told a reporter that he had raised less than US$2m ($2.7m).

Over the weekend, it appeared the company was trying to return investments – asking investors to contact them in the next 90 days.

But one investor, who did get a refund, said he is still annoyed after getting a dollar amount equal to what he invested in September.

"But since the coin has more than tripled in value since then, they kept the rest of my contribution, essentially stealing quite a lot of money from me," he said.

It comes days after the U.S. Securities and Exchange Commission warned that investors should "exercise caution" with cryptocurrencies like bitcoin, noting state and federal regulators may not be able to recoup any lost investments from illegal actors.

Many promoters of initial coin offerings (ICOs) and other cryptocurrency investments are not following federal and state securities laws, SEC Chairman Jay Clayton and Commissioners Kara Stein and Michael Piwowar said in a statement.

While regulators are trying to police these quickly growing markets, the SEC urged investors to be vigilant.

"The SEC and state securities regulators are pursuing violations, but we again caution you that, if you lose money, there is a substantial risk that our efforts will not result in a recovery of your investment," the officials said.