Tennessee Candidate Indicted for $1.9M Crypto Ponzi Scheme

“Ponzi schemes, cryptocurrency scams, and financial fraud can be devastating to individual investors, harmful to financial institutions, and detrimental to the U.S. Treasury,” said U.S. Attorney Kevin G. Ritz in a statement. “We commend our federal agency partners for their outstanding investigation in this egregious case. Wherever fraud occurs in the Western District of Tennessee, this office will be prepared to hold offenders accountable.”

Abidi faces three counts of wire fraud, each carrying up to 20 years in prison, and three counts of money laundering, each with up to 10 years. He also faces two counts of operating an unlicensed money transmitting business and three counts of aiding in the preparation of false tax returns.

The case is one of several recent federal actions targeting alleged crypto fraud tied to political candidates. In 2023, a former congressional candidate in California was charged with running a similar scheme. The Tennessee indictment adds to the growing list of enforcement actions as regulators and prosecutors step up scrutiny of digital asset investment pitches that promise unrealistic returns.

For investors, the case is a reminder that the basic warning signs of a Ponzi scheme – guaranteed returns, secret trading strategies, and pressure to bring in new money – apply just as much to crypto as to any other asset class. The indictment does not name any victims or specify how many people invested.

Abidi is scheduled to appear in federal court in Memphis. A trial date has not been set.