California regulators have ordered Fintoch and its associated entity Morgan DF Fintoch LLC to stop offering or selling securities in the state. The Department of Financial Protection and Innovation (DFPI) issued a desist and refrain fraud order on August 13th, finding the companies sold unqualified investment contracts.

The DFPI’s investigation revealed that Fintoch began soliciting investors in California at least as early as 2023. These investment contracts were offered through the company’s website. The securities sold were neither qualified nor exempt from qualification requirements under California law. Fintoch had not obtained any permit or authorization from the DFPI to sell these investments.

The Commissioner concluded that Fintoch LLC and Morgan DF Fintoch LLC violated Corporations Code section 25110. This section mandates that securities offered or sold in California must be qualified. Consequently, Fintoch and Morgan DF Fintoch LLC are now prohibited from any further offer or sale of securities in California until qualification requirements are met.

Fintoch operated as a cryptocurrency Ponzi scheme, launching in 2022. The operation initially presented a fictional CEO named “Bobby Joe Lambert,” portrayed by actor Mike Provenzano. Later, actor Joel Fry joined as "William Thompson," Fintoch's Chairman of the Board. The DFPI noted the deceptive use of actors.

The department stated that “Bob Lambert” and “William Thompson” were not real individuals. Fintoch hired actors to play these roles in promotional videos and at certain events. These actors read from scripts and teleprompters provided by Fintoch. Actors were also used as extras in other Fintoch promotional activities.

Fintoch produced numerous videos on YouTube featuring these actors as its supposed executives. They discussed Fintoch's business and promoted its supposed success and profitability. One video depicted a tour of a Fintoch research and development office in Silicon Valley, complete with Fintoch logos and actors playing employees. The executives claimed this was the hub of Fintoch's blockchain innovation.

In reality, this office setting was staged. Fintoch rented the space for a single day to film the video and hired actors to portray employees. Fintoch itself was structured as two California shell companies: Fintoch LLC and Morgan DF Fintoch LLC.

The scheme collapsed in May 2023, shortly after Singapore issued a securities fraud warning. This timing suggests Chinese scammers were likely behind the Ponzi operation. While actor-fronted Ponzi schemes are often run by Eastern European scammers, instances of Chinese scammers adopting this model in Asia have been observed.

In August 2023, Fintoch announced a new venture called Standard Cross Finance, also known as SCF Chain. Joel Fry again fronted this scam. Standard Cross Finance subsequently collapsed in October 2023. The total amount lost by investors in both Fintoch and Standard Cross Finance remains undetermined.