Nixse
0

Cryptocoin: SEC Charges ‘Unregistered’ ICO Superstore

CRYPTOCOIN – The U.S. Securities and Exchange Commission (SEC) charged the operators of a Michigan-based startup “ICO Superstore” that sells digital tokens to investors. This was after the SEC found that the ICO Superstore was acting as unregistered broker-dealers.

According to the communiqué, which was issued by the Commission on the matter, Lenny Kugel and Eli L. Lewitt, the owners of TokenLot LLC, have agreed to make a $550,000 payment in settling charges, however, without admitting or denying the findings of the SEC. The Commission has also given them a lifetime officer-director bar, lifetime penny stock bar and an injunction to prevent them from violating federal securities laws.

The company has an undisclosed amount of funds coming from 6,100 retail investors. The funds finance the development of the company’s blockchain-based platform which handles the ICO tokens’ purchases. As per TokenLot, it allows users to work on all of their ICO due diligence and purchasing through one consolidated service.

Based on the order of the SEC, the offering conflicts the laws on securities because the tokens which the company offers are considered securities. Further, their activities are not registered with the SEC as broker-dealers.

FinanceBrokerage - Cryptocoin In first, FINRA issues fraud charges against ICOs
FINRA has filed fraud charges for the first time against the practice of initial coin offerings or ICOs

Generally, the regulatory status of ICOS and other cryptocurrency offerings still appear suspicious. However, the SEC flagged warnings that a few virtual tokens may come under securities law depending on the offerings’ details. Consequently, requirements such as securities registration, disclosure and others might be applied in those cases.

“The regulator encourages those developing digital asset trading businesses to contact the SEC staff at [email protected] for assistance in analyzing registration and other securities law requirements,” said Stephanie Avakian, Co-Director of the SEC’s Enforcement Division.

For several times, the Commission has flagged warnings to investors against putting money into the crowdsale. That is because the company had plans to launch its own cryptocurrency-based ‎investment scheme having no compliance with securities laws in the United States.

Cryptocoin: In first, FINRA issues fraud charges against ICOs

The Financial Industry Regulatory Authority (FINRA) has issued fraud charges for the first time against the practice of initial coin offerings or ICOs. FINRA accused Timothy Tilton Ayre who is a resident from Massachusetts. Ayre was allegedly defrauding investors through selling “HempCoin,” a cryptocurrency, which he tainted as backed by investments in a public company.

The statement of FINRA has illustrated the process of how Ayre traded HempCoin to attract victims in investing in his “worthless” company called Rocky Mountain Ayre, Inc.

The complaint stated that Ayre repackaged the HempCoin tokens and named it “a security backed by RMTN common stock.” Moreover, he also promoted the digital token as the world’s first cryptocurrency to represent equity ownership in a publicly traded company.



You might also like
Leave A Reply

Your email address will not be published.