SEC Announces Crackdown on ICO Cryptocurrency Offerings
Investigates ı By USA Herald
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According to an SEC source, there are sweeping actions coming on a number of blockchain companies that are raising capital via ICOs (Initial Coin Offerings). These actions will likely include civil forfeiture of all capital raised via the ICO offerings.
Additionally earlier today the USA Herald spoke with Ryan T. White, Public Affiars Specialist at the SEC. According to Mr. White, when probed about specific actions the SEC is taking against certain ICOs, Mr. White commented "We don’t confirm or deny the existence or nonexistence of an investigation, or what we’re looking into."
Here is a list of cryptocurrency/ICO cases and trading suspensions that the SEC has announced:
Digital Currency/Initial Coin Offerings
| Action Name | Description | Date Filed |
|---|---|---|
| SEC v. Jon E. Montroll and Bitfunder | The Commission filed a district court action against a former bitcoin-denominated platform and its operator for operating an unregistered securities exchange and defrauding users of that exchange. The SEC also charged the operator with making false and misleading statements in connection with an unregistered offering of securities. | 2/21/2018 |
| SEC v. AriseBank et al. | The Commission filed a district court action and obtained an emergency asset freeze against an allegedly fraudulent ICO that claimed to run the world’s first “decentralized bank.” | 1/25/2018 |
| In re Munchee, Inc | The Commission filed a settled cease and desist order against a California-based company selling digital tokens in an unregistered offering to investors to raise capital for its blockchain-based food review service. | 12/11/2017 |
| SEC v. PlexCorps et al. | The Commission filed a district court action and obtained an emergency asset freeze against a recidivist Quebec securities law violator, Dominic Lacroix, and his company, PlexCorps. | 12/1/2017 |
| SEC v. REcoin Group Foundation, LLC et al. | The Commission charged Maksim Zaslavskiy and his two companies with defrauding investors in a pair of so-called initial coin offerings (ICOs) purportedly backed by investments in real estate and diamonds (Recoin Group Foundation and Diamond Reserve Club). | 9/29/2017 |
| Report of Investigation Pursuant to Section 21(a) of the Securities Exchange Act of 1934: The DAO | The Commission issued a Report of Investigation concerning the application of the U.S. federal securities laws to the offer and sale of DAO Tokens, which were virtual tokens created and distributed on a blockchain by an entity called “The DAO.” | 7/25/2017 |
| SEC v. Renwick Haddow, et al. | The Commission filed a district court action and obtained an emergency asset freeze against Renwick Haddow, the founder of a purported Bitcoin holding-and-trading platform and a chain of co-working spaces, alleging that he defrauded investors in both companies while also hiding his connection given his past disciplinary history with U.K. regulators. | 6/30/2017 |
| In re Bitcoin Investment Trust and SecondMarket, Inc. | The Commission filed a settled administrative proceeding against SecondMarket, Inc., a New York broker-dealer registered with the Commission, and Bitcoin Investment Trust (BIT), a Delaware trust whose sole assets are bitcoins. Each agreed to settle charges that they respectively violated Rules 101 and 102 of Regulation M under the Securities Exchange Act of 1934 in connection with their purchases of BIT shares during a continuous distribution. | 7/11/2016 |
| SEC v. Homero Joshua Garza, GAW Miners, LLC, et al. | The Commission charged Garza and his two bitcoin mining companies with conducting a Ponzi scheme by offering shares – called “Hashlets” – in a bitcoin mining operation that did not have enough computing power for the mining they promised to conduct. | 12/1/2015 |
| In re Sand Hill Exchange et al. | In June 2015, the SEC filed a settled administrative action against 2 entrepreneurs who offered and sold security-based swaps through a website called Sand Hill exchange and sought people to fund accounts at Sand Hill using dollars or bitcoins. | 6/17/2015 |
| In re BTC Trading, Corp. and Ethan Burnside | The Commission brought a settled administrative proceeding against Burnside, a video game programmer and bitcoin hobbyist, for (a) operating two online venues for trading securities – BTC Virtual Stock Exchange and LTC-Global Virtual Stock Exchange – using bitcoin and litecoin without registering the sites as broker-dealers or stock exchanges, and (b) conducting two unregistered offerings, one in LTC-Global itself, and another in a litecoin mining venture he owned and operated. | 12/8/2014 |
| In re Erik T. Voorhees | The Commission charged Voorhees, a Bitcoin entrepreneur with the offer and sale of unregistered securities in SatoshiDICE, a well-known bitcoin betting game, and FeedZeBirds, a social media marketing venture. | 6/3/2014 |
| SEC v. Trendon T. Shavers and Bitcoin Savings and Trust | The Commission charged Shavers and his company with defrauding investors in a bitcoin-denominated Ponzi scheme, raising more than 700,000 bitcoins in principal investments from BTCST investors, and falsely promising of up to 7% weekly returns based on BTCST’s purported bitcoin market arbitrage activity. | 7/23/2013 |
Account Intrusion
| Action Name | Description | Date Filed |
|---|---|---|
| SEC v. Joseph P. Willner | Day trader hacked into over 100 online customer brokerage accounts to manipulate the price of securities generating at least $700,000 in illicit profits | 10/30/2017 |
| SEC v. Mustapha, Idris Dayo | Overseas trader hacked into online customer brokerage accounts to manipulate stock prices through unauthorized trades | 6/22/2016 |
| SEC v. Nagaicevs, Igors | Overseas trader hacked into online customer brokerage accounts to manipulate stock prices through unauthorized trades | 1/26/2012 |
Hacking/Insider Trading
| Action Name | Description | Date Filed |
|---|---|---|
| SEC v. Hong, Iat, et al. | Overseas traders hacked into two U.S. law firms to obtain nonpublic information on which they traded | 12/27/2016 |
| SEC v. Ly, Jonathan | IT specialist hacked into the email accounts of senior executives of his employer to obtain nonpublic information on which he traded | 12/5/2016 |
| SEC v. Dubovoy, Arkadiy, et al. | Overseas trading ring hacked into the servers of newswire services to obtain nonpublic information on which they traded | 5/4/2016 |
| SEC v. Zavodchiko, Evegenii, et al. | Overseas trading ring hacked into the servers of newswire services to obtain nonpublic information on which they traded | 2/18/2016 |
Market Manipulation
| Action Name | Description | Date Filed |
|---|---|---|
| SEC v. Murray, Robert W | U.S.-based trader filed false tender offer form on EDGAR to manipulate stock price | 5/19/2017 |
| SEC v. Aly, Nauman A. | Overseas trader manipulated stock price by filing false Schedule 13D form on EDGAR | 5/24/2016 |
| SEC v. PTG Capital Partners LTD, et al. | Overseas trader manipulated prices of stocks through false EDGAR filings | 3/11/2016 |
| SEC v. Craig, James Alan | Overseas trader disseminated false tweets to manipulate stock prices | 11/6/2015 |
Safeguarding Customer Information
| Action Name | Description | Date Filed |
|---|---|---|
| Morgan Stanley Smith Barney LLC | Failure to safeguard customer data in violation of Reg SP | 6/8/2016 |
| RT Jones Capital Equities Management, Inc. | Failure to safeguard customer data from cyber-breaches in violation of Reg SP | 9/22/2015 |
Trading Suspensions
| Action Name | Description | Date Filed |
|---|---|---|
| HD View 360 Inc. | The Commission suspended trading in this publicly-traded company because of concerns regarding the accuracy and adequacy of information about the company, including certain statements regarding enhancing a subsidiary with blockchain technology. | 3/1/2018 |
| Cherubim Interests, Inc. | The Commission suspended trading in this publicly-traded company because of concerns regarding the accuracy and adequacy of information in the marketplace including in press releases issued. | 2/16/2018 |
| PDX Partners, Inc., | The Commission suspended trading in this publicly-traded company because of concerns regarding the accuracy and adequacy of information in the marketplace about, among other things, the nature of the company’s business operations and the value of its assets. | 2/16/2018 |
| Victura Construction Group, Inc., | The Commission suspended trading in this publicly-traded company because of concerns regarding the accuracy and adequacy of information in the marketplace about, among other things, the nature of the company’s business operations and the value of its assets, including in press releases issued. | 2/16/2018 |
| UBI Blockchain Internet, Ltd. | The Commission suspended trading in this publicly-traded company because of (i) questions regarding the accuracy of assertions, since at least September 2017, by UBIA in filings with the Commission regarding the company’s business operations; and (ii) concerns about recent, unusual and unexplained market activity in the company’s Class A common stock since at least November 2017. | 1/5/2018 |
| The Crypto Co. | The Commission suspended trading in this publicly-traded company because of concerns regarding the accuracy and adequacy of information in the marketplace about, among other things, the compensation paid for promotion of the company, and statements in Commission filings about the plans of the company’s insiders to sell their shares of The Crypto Company’s common stock. | 12/18/2017 |
| In re Rocky Mountain Ayres, Inc. | The Commission suspended trading in this publicly-traded company because of questions regarding by RMTN in a press release dated August 22, 2017, and in the “Project White Paper” documents, accessible through a link in the press release, concerning, among other things, the Kairos ETF. | 9/15/2017 |
| In re American Security Resources Corp. | The Commission suspended trading in this publicly-traded company because of questions regarding information concerning the company’s transition to the cryptocurrency markets and early adoption of blockchain technology. | 8/24/2017 |
| In re First Bitcoin Capital Corp. | The Commission suspended trading in this publicly-traded company because of concerns regarding the accuracy and adequacy of information about the company’s value of the company’s assets and capital structure. | 8/23/2017 |
| In re CIAO Group, Inc. | The Commission suspended trading in this publicly-traded company because of questions regarding the accuracy of assertions concerning business plans in the telecommunications industry and plans for an ICO. | 8/9/2017 |
| In re Strategic Global Investments, Inc. | The Commission suspended trading in the securities of this publicly-traded company because of questions regarding the accuracy of assertions by the company concerning ICOs. | 8/3/2017 |
| In re Sunshine Capital, Inc. | The Commission suspended trading in the securities of this publicly-traded company because of questions regarding the accuracy of assertions by the company concerning the liquidity and value of the company’s assets, namely DIBCOINS, a cryptocurrency the company’s majority shareholder had created. | 4/11/2017 |
| In re Imogo Mobile Technologies Corp. | The Commission suspended trading in the securities of this publicly-traded company amidst questions about its business which touted, among other things, the development and testing of a purportedly secure mobile Bitcoin platform. | 2/19/2014 |
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