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ARTICLE · 09 JULY 2020

SEC Charges Issuer, CEO, And Lobbyist For Cryptocurrency Fraud

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The SEC charged an issuer and its CEO, and a lobbyist, in cryptocurrency fraud cases.

United StatesTechnology
Kyle DeYoung
Kyle DeYoung
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The SEC separately charged an issuer and its CEO (see here), and a lobbyist (see here) with conducting fraudulent unregistered offerings of a cryptocurrency.

In the Complaint against the issuer and its CEO, the SEC alleged that the issuer raised at least $5.6 million from more than 2,400 investors by selling tokens that the issuer asserted could be transformed in a superior version of bitcoin with anti-money laundering and security features built into the coin. The SEC claimed that none of the advertised capabilities actually existed, and the development of the required blockchain was minimal. The SEC alleged that the defendants repeatedly misled investors by falsely claiming that the technology would make digital asset transactions more secure. Additionally, the SEC alleged the CEO diverted approximately $1.1 million from the offering for his personal use. The SEC is seeking (i) permanent injunctions, (ii) disgorgement, (iii) civil penalties, (iv) injunctions

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