Late last week, the Securities and Exchange Commission (SEC) charged Mr. Boaz Manor, Ms. Edith Pardo and two related entities, CG Blockchain Inc. and BCT Inc. SEZC, for violating federal securities laws when raising more than $30 million from hundreds of investors in a fraudulent initial coin offering (ICO). The SEC alleges that the defendants falsely claimed to have 20 hedge funds testing their technology to record transactions on a blockchain, when, in fact, the defendants only sent a prototype to a dozen funds, none of which used or paid for it. In addition, the complaint describes how Manor, a convicted criminal, hid his identity and criminal past from investors by changing his physical appearance and using an alias. The U.S. Attorney's Office announced criminal charges against Manor and Pardo in a parallel action.
The SEC filed another ICO-related complaint this week against Opporty International Inc. and its founder and owner, Mr. Sergii Grybniak. The SEC alleges that the defendants' ICO constituted an unlawful, unregistered securities offering, and that the defendants made false and misleading statements to investors, including that the ICO was "100% SEC compliant."
The Internal Revenue Service (IRS) recently updated its Frequently Asked Questions page on its website to address the responsibilities and reporting obligations for charitable donations made with cryptocurrency. The guidance provides that a charitable organization that receives virtual currency should treat the donation as a noncash contribution. It also describes donor acknowledgment responsibilities for donations of more than $5,000 in cryptocurrency, leading some analysts to conclude that high-value cryptocurrency donations must be appraised.
The U.K.'s tax agency, Her Majesty's Revenue and Customs, recently requested proposals for a blockchain analytics tool to help combat illegal cryptocurrency trading. According to the agency, the tool would "support intelligence-gathering methods to identify and cluster crypto-asset transactions into linked transactions and identify those linked to crypto-asset service providers." The agency is willing to spend £100,000 to license the tool. Proposals are invited until Jan. 31 of this year.
For more information, please refer to the following links:
- SEC Charges Convicted Criminal Who Conducted Fraudulent ICO Using a Fake Identity
- SEC Charges Blockchain Marketplace Opporty Over 'Fraudulent' $600,000 ICO
- Two People Indicted For $30 Million Dollar Fraud Scheme Involving Blockchain Technology Company
- IRS Update Reignites Concerns About Crypto Donation Appraisals
- UK's tax authority wants to deploy a blockchain analytics tool to catch crypto cybercriminals
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