Delgado is a Florida resident who was arrested last month in connection with the allegations.
Alleged Liquidity Pool Scheme
Investigators state that Delgado promoted investment opportunities, promising unusually high monthly returns, claiming that client funds would be placed into crypto liquidity pools. These automated digital asset pools are typically used on decentralized finance (DeFi News) trading platforms for token swaps and yield generation.
However, the U.S. Department of Justice alleges that most investors' funds were not placed into liquidity pools as advertised.
Instead, prosecutors claim that the funds were misappropriated for personal expenses, including luxury travel, real estate purchases, and entertainment costs, while some funds were used to pay earlier investors to maintain operations.
Authorities state that the scheme ultimately raised hundreds of millions of dollars from investors.
Bank Accused of Failing to Intervene
An investor who lost money in this alleged scam is now seeking compensation from JPMorgan, arguing that the bank should have recognized warning signs associated with Goliath Ventures' activities.
The lawsuit claims that since the company publicly identified itself as operating a crypto liquidity pool, JPMorgan should have verified whether the business was registered with financial regulators such as the Commodity Futures Trading Commission.
The complaint further alleges that the bank failed to conduct adequate due diligence according to standard Know Your Customer (KYC) procedures before maintaining the company's accounts.
JPMorgan declined to comment on the lawsuit.
This case adds to the growing number of legal controversies exploring whether financial institutions should bear responsibility when fraudulent crypto investment schemes transfer funds through traditional banking channels.