This week the U.S. Securities and Exchange Commission (SEC) announced that it has settled charges against SimplyVital Health Inc. related to an initial coin offering (ICO) presale, in which the company allegedly raised $6.3 million in an unregistered sale of securities that took place between September 2017 and April 2018. After being contacted by the SEC, SimplyVital canceled its scheduled ICO and voluntarily returned to investors substantially all the funds raised in the unregistered offering.
Also this week, the SEC filed an emergency action in federal court and an application for a temporary restraining order (TRO) against Reginald Middleton, Veritaseum Inc. and Veritaseum LLC, seeking to freeze approximately $8 million of proceeds raised in what the SEC has alleged was a fraudulent ICO scheme and unregistered securities offering that took place in 2017 and 2018. According to the complaint, after being contacted by the SEC, "Defendants moved more than $2 million in remaining Offering proceeds from a blockchain address they controlled into other addresses, and used a portion of those funds to purchase more precious metals." The TRO application seeks to freeze U.S. dollars held in multiple bank accounts and ether held in multiple Ethereum public key addresses.
In a third ICO-related action this week, the SEC filed a proposed settlement agreement with PlexCorps, the defendant in an SEC enforcement action involving an alleged fraudulent ICO scheme that took place in 2017. Penalties under the settlement agreement include forfeiture of ill-gotten gains, civil penalties of $1 million per individual defendant, injunctions against "engaging in any offering of digital securities," and barring one individual defendant from serving as a director or officer in a public company.
Late last week, the Texas State Securities Board issued an emergency cease-and-desist order against Forex and Bitcoin Trader. The order alleges Forex and Bitcoin Trader, which advertises on Craigslist Dallas, is misleading investors and falsely claiming to be a licensed broker.
In foreign enforcement news, according to reports, the British tax authority recently contacted several cryptocurrency exchanges to request user information related to tax enforcement actions. Additionally, the U.K. Advertising Standards Authority recently issued a decision in favor of complaints alleging misleading advertising by a foreign-based cryptocurrency exchange.
For more information, please refer to the following links:
- SEC Charges Blockchain Company for $6.3 Million Unregistered ICO
- SEC Requests Freeze on Assets in Connection With Alleged $15M ICO Fraud
- NYC Man Faces Suit to Bar Use of Cash in Digital-Coin Fraud (1)
- SEC TRO: Reginald Middleton, Veritaseum, Inc.
- US Financial Regulators Reach $7M Settlement Over PlexCorps ICO
- Proposed Settlement: SEC v. PlexCorps
- Texas State Securities Board Emergency Order Cites Bitcoin, Forex Trader As Crypto Crackdown Continues
- HMRC Asks Cryptocurrency Exchanges For UK Customer Info
- UK Advertising Watchdog Upholds Complaints Against BitMEX Bitcoin Promotion
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