Speaking favorably about the troubled virtual currency Gemcoin in the past has cost Arcadian Councilman John Wuo his job.
The news of his resignation was reported by the news site Latimes.com.
Wuo had earlier appeared in several YouTube videos promoting Gemcoin which brought irate users of the digital currency to demand an explanation from him as well.
The resignation of the Councilman also comes close on the heels of a major investigation which is being undertaken on the complaint of the disgruntled consumers of the virtual currency.
The problem with the Gemcoin came to light after a complaint was filed with the Securities and Exchange Commission (SEC) against the company founder Steve Chen who was accused of running a pyramid scheme.
Another charge against Chen was that he had attempted to transfer $7.5 million out of USFIA’s account at Bank of America (BoA) to a Chinese bank.
Later, Arcadia-based Gemcoin was in the news when it was raided by federal authorities on the charges of bilking about $32 million from Chinese and U.S. investors.
The authorities removed many computers and boxes containing evidence and even locked the doors of the firm.
Wuo’s appearance in the videos, was in recent months, under heavy criticism and the pressure was mounting on him to quit the job.
However, Latimes.com also reported that the calls for his resignation increased further this Monday when an investor filed a suit against Wuo, USFIA and other parties in Los Angeles Superior Court which also claimed fraud and negligent misrepresentation.
It is prudent to note that USFIA is legally registered in the United States of America and has its headquarter in Arcadia, California and on its website, the company proudly highlights that it is a US-Chinese joint venture that also enjoys strong political patronage.
The company also claims that the value of Gemcoin is backed by “parent company AFG’s 10 Precious Gem mines and that its coins are stable as it is backed by its equivalent in precious stones.”