Digital asset trading ‘educator' accused of fraud in new lawsuit

Coin Geek

4 hours ago

Getting your Trinity Audio player ready...
Furus beware: a digital asset investor who poured nearly $1 million into a popular 'crypto trading course' is suing for fraud, according to filings made June 11.
The suit is filed by disgruntled student Brian Firestone. It accuses Alpha Stock Investment Training Center (ASITC) and its Chairman, John Smith, of running a fraudulent scheme to siphon money away from clients under the guise of a paid digital currency trading educational course, promising massive returns to clients willing to pay for trading signals and investment strategies.
Firestone was first approached by ASITC and Smith in late 2024 when Smith offered to train Firestone on digital currency trading and promised a no-strings-attached $500 to test their advice using Coinbridge, an affiliated exchange.
Within weeks, Firestone turned that paltry amount into $55,000 of profit. ASITC and Smith then encouraged Firestone to invest his own money to keep the good times rolling. Firestone agreed, putting up $50,000.
Firestone initially saw more success: his $50,000 investment ballooned to $2,000,000—only to crash back down to a piddling $12,000 within a few weeks.
Firestone was next persuaded by ASITC to 'invest' another $800,000 to gain access to a 'higher level of trading strategy.' $470,000 was to come from Firestone himself, while ASITC would loan him $330,000 worth of USDT for the rest. Firestone agreed.
That higher level apparently contained some genuine insight because the plaintiff says his account boomed to $24,500,000 shortly thereafter. This took him over the threshold set by ASITC, which would allow investors to take profits—but according to the suit, ASITC not only refused to honor the threshold, they 'sabotaged' his largest position by preventing him from closing a highly leveraged option trade. Firestone had to watch as his account fell back down to zero.
And in a cautionary tale about the allure of sunk costs, ASITC and Smith convinced Firestone to accept another USDT loan—this time for $1,000,000. But as soon as Firestone began to make money again, ASITC and Smith demanded that the original $330,000 loan be repaid in 'outside cash' before they'd let him withdraw from his trading account. This evidently prevented Firestone from using the assets already in his trading account to repay the loan.
When Firestone refused, his account was shut down, and his balance—by then worth more than $6.6 million USDT—was wiped to $0.
Now, Firestone says ASITC's business model amounts to a fraudulent scheme. He's suing across nine separate counts, including fraud, unjust enrichment and breach of contract, civil theft, and breach of fiduciary duty. Beware the fake guru
In frothy markets, the so-called guru promising to sell their trading knowledge in exchange for money is a common feature. These people will tell you they aren't just gifting you fish; they're teaching you how to catch them yourself—for a price.
These furus (or fake gurus) can be found in the property market, promising to teach paying customers how to become real estate moguls. There are even furus who will charge to be taught how to open and run profitable Amazon (NASDAQ: AMZN) stores, as shown by a Federal Trade Commission lawsuit against DK Automation in 2022 (unsurprisingly, DK Automation was also revealed to be selling digital asset money making courses at similarly extortionate prices).
The promise of riches can make these scams hard for some to spot. As Firestone's story shows, some people using these courses will see financial success in the short term, making it hard for prospective customers to judge how valuable the course is.
Looking at the ASITC's promotional materials, it certainly ticks many of the boxes you'd expect out of a furu: they talk about 'democratizing' financial education, 'empowering' individuals, and even touts its proprietary 'StarSpark AI system,' which supposedly revolutionizes stock investment training by 'analysing individual learning patterns and real-time market data.'
It further promised returns of 400%—something its written agreement with Firestone even guaranteed in full, offering to pay him whatever shortfall might exist at the end of the program.
Firestone's story is far from unique, but it does offer a sad look into the world of the furu. It contains excerpts from messages between Firestone and Smith:
'Good afternoon Professor Smith,' writes Firestone in one message. 'Congratulations on your continuing successful trades this afternoon. I really get the Cycle theory whereby major technological advancement results in 50 year cycles. I want signals. Thx.'
'I am very grateful to you and the entire team. This is a great place to be.'
'Trust me, this is just the beginning,' said Smith in one reply. 'There will be many opportunities like this in the future.'
Firestone discovered that there were not, in fact, many more opportunities like this in the future.
None of the defendants have filed a response to Firestone's lawsuit at the time of writing. The case number is 1:25-cv-01825.
Watch | Educating from scratch: Inspiring future innovators in Poznań & beyond
title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen="">