SEC charges DeFi Money Market, its co-founders for offering unregistered digital tokens

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The respondents took steps to returns and/or preserve De-Fi Money Market’s assets for the benefit of the investors of mTokens and DMG tokens. Keough and Acree provided sufficient funds from their personal accounts to pay investors’ principal and interests that they owed.

The SEC ordered the respondents to pay disgorgement totaling $12,849,354. The Commission also ordered Keough and Acree to pay penalties of $125,000 each.

They also agreed to the order requiring them to stop violating Sections 5(a) and 5(c) of the Securities Act of 1933 and the anti-fraud provisions of Section 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5.

De-Fi Money Market, Keough, and Acree consented to the SEC Order without admitting or denying its findings.

In a statement, the SEC Division of Enforcement, Complex Financial Instruments Unit Chief Daniel Michael said, “The federal securities laws apply with equal force to age-old frauds wrapped in today’s latest technology. Here, the labeling of the offering as decentralized and the securities as governance tokens did not hinder us from ensuring that DeFi Money Market was immediately shut down and that investors were paid back.”