Bitcoin Global News (BGN)
September 13, 2018 -- ADVFN Crypto NewsWire -- For as much as U.S.
governing bodies have critisied cryptocurrencies, and especially
ICOs for risks, fraud and deception, there has not been widespread
action taken. There have been several major lawsuits filed, but
recently the SEC has made two new charges and FINRA has stepped
into make their first case for fraud against a cryptocurrency
related company
SEC Charges Two
Companies
Crypto Asset Management LP
has been accused of marketing under false pretenses, and TokenLot
LLC have been accused of acting as unregistered broker-dealers. In
both cases, the SEC has already reached agreement with the owners
of the companies.
Crypto Asset Management - Its
principal owner, Timothy Enneking raised more than $3 million in
late 2017 claiming that the company was "the first regulated crypto
asset fund in the United States." He has agreed to pay a penalty of
$200,000 and confirm the SEC's cease-and-desist order, but he has
not admitted or denied the accusations.
TokenLot - Owners Lenny Kugel and
Eli L. Lewitt, described their project as an "ICO Superstore.” They
claimed to have "received orders from more than 6,100 retail
investors and handled more than 200 different digital tokens.” Many
of the digital tokens they cited would be considered
securities. The owners have also neither confirmed or denied the
accusations, but have agreed to pay $471,000 in disgorgement plus
$7,929 in interest. In addition, the two will each pay $45,000
individually in penalties and have been ordered an “investment
company prohibition with the right to reapply after three years."
An independent third party will be contracted to “destroy
TokenLot's remaining inventory of digital assets."
Judge Confirms Decision On
“ReCoin” and “DRC World”
A judge in New York state ruled
that the decision on a case against a pair of fraudulent ICOs from
last year will be upheld, in accordance with the regulatory
structure set in place by the SEC. The defendant had asked the case
to be dismissed. It involved serious consumer deception tactics
involving two separate businesses owned by the
defendant.
The first, “DRC World” claimed to
have raised "between $2 million and $4 million,” but the total was
only $300,000. The company advertised purchasing their token would
create an investment in discounted diamonds, but they never did
this and had no relation to the diamond industry. The second
“ReCoin” was supposed to account for investment in physical real
estate, but this similarly never happened.
FINRA Charges HempCoin
Founder
A Massachusetts resident is being
charged by FINRA with securities fraud for an unregistered token
sale. HempCoin token claimed to be "the first minable coin backed
by marketable securities… the world's first currency to represent
equity ownership." But the company and its owner never actually
applied for an exemption. No action has been taken by the defendant
in this case yet, and the expected punishment if found guilty has
not been stated by FINRA.
By: BGN Editorial Staff
News:
ICO Fraud
Cryptocurrency
SEC