ICO LOCIcoins and CEO hit with $7.6M fine over unregistered securities, fraud charges

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The US Securities and Exchange Commission (SEC) has settled charges against Loci Inc. and its CEO John Wise in connection with an unregistered securities offering that allegedly made materially false and misleading statements in connection with the sale of digital assets Securities.

In a press release, the regulator said it had raised the charges in return for accepting a cease and desist order against the company and its CEO, an obligation to destroy the remaining unregistered tokens, the publication of the result on the company’s social media channels, and an obligation not to participate in future digital asset securities offerings.

The settlement also includes a bar and directors’ association for Wise and a civil penalty of $ 7.6 million.

According to SEC fees, Loci offered an intellectual property tracing service through its InnVenn platform, for which it sold tokens called LOCIcoin over a period from 2017 to 2018. The sale raised $ 7.6 million but was raised because of misrepresentations including the company’s revenue, number of employees, and the number of users of its platform.

The order also found that Wise had misused $ 38,163 of funds to cover personal expenses. While the token issue has been determined to be legally an offering of securities, it has not been properly registered with the SEC by the company.

Kristina Littman, head of the SEC Enforcement Division’s cyber unit, said the company and Wise had significantly misled investors by putting their unregistered security tokens up for sale.

“Loci and its CEO have misled investors about critical aspects of Loci’s business. Digital securities investors are entitled to truthful information and full disclosure so that they can make informed investment decisions. “

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