The SEC order also found that Tomahawk claimed token owners would be able to convert the Tomahawkcoins into an equity position. In doing so, prospective investors would be able to potentially profit from the anticipated oil production and secondary trading of the tokens.
Although the Tomahawk ICO failed to raise the required capital, Tomahawk issued tokens through a “bounty program” in exchange for online promotional services.
Investor Beware
“Investors should be alert to the risk of old-school frauds, like oil and gas schemes, masquerading as innovative blockchain-based ICOs,” said Robert A. Cohen, chief of the SEC’s cyber unit.
As a result of Tomahawk’s fraud scheme, the SEC’s Office of Investor Education and Advocacy issued an investor alert to encourage investors to check the background of anyone selling or offering an investment. Investors may utilize the free and simple search tool on Investor.gov. Finally, the OIEA’s Investor Bulletin about ICOs is another resource describing potential warning signs of investment fraud including “guaranteed” high investment returns and unlicensed sellers.
