Two related cryptocurrency investment companies and their founder recently filed a malpractice claim against their former law firm, after the SEC ordered the companies and their founder to pay a $200,000 fine for promoting "the first regulated Crypto Asset Fund in the United States" and raising around $3.6 million from 44 investors without first registering as an investment company with the SEC. The complaint alleges that the law firm "provided inaccurate analysis and advice" when it told the investment companies that their crypto-assets were not securities.
The SEC's Office of Compliance Inspections and Examinations published its 2020 Examination Priorities. The publication confirmed that the SEC will prioritize the evaluation of digital asset markets in order to protect retail investors. Such oversight will include assessing the safety of client funds, the suitability of investments, trading practices and portfolio management, valuation and pricing, compliance protocols, transfer agents, and outside business activities conducted by employees of digital asset market participants.
For more information, please refer to the following links:
- Crypto Biz Blames FaegreBD's Advice For $200K SEC Fine
- Crypto fund has sued law firm Faegre Baker for 'erroneous' legal advice
- The Securities and Exchange Commission (SEC) will continue its evaluation of cryptocurrency-based securities for U.S. retail investors
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