The US Securities and Exchange Commission announced that it has settled charges against a company and its CEO for misleading statements related to an unregistered ICO.
Loci Inc. and its CEO, John Wise, have been charged with making “materially false” and misleading statements related to an unregistered sale of digital assets.
The financial regulator posted the notice on its official website, adding that the company misused investor funds and misrepresented the company’s earnings, number of employees and platform user base.
$ 7.6 million fine
SEC regulation found that Loci and its CEO raised $ 7.6 million from investors in an ICO from August 2017 to January 2018 by offering and selling crypto tokens called “LOCIcoin”.
The company sponsored a software platform called InnVenn, which was touted as the “ultimate asset management system”. The order also found that Wise misused $ 38,163 of investor proceeds to pay for his personal expenses.
LOCIcoins have actually been classified as securities, the SEC added, but the offering has not been registered with the regulator and there has been no exception to registration. Kristina Littman, Head of the Cyber Unit of the SEC Enforcement Division, said:
“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. “
The company has neither admitted nor denied the SEC’s findings, but has agreed to an injunction. It also agreed to destroy their remaining tokens and request their removal from trading platforms. She would also post the SEC’s ruling on her social media channels and refrain from participating in future digital asset securities offerings.
Crypto lawyer “_gabrielShapir0” [@lex_node] commented on the destruction of the tokens with the words:
“Really disappointed with the direction the SEC has taken with tokens – it no longer has anything to do with investor protection; In fact, the SEC is causing and exacerbating investor harm. “
The story goes on
The SEC order imposes a civil penalty of $ 7.6 million on Loci and its CEO.
Crypto off the agenda?
On June 18, it was reported that the SEC released its regulatory agenda for 2021 and that cryptocurrencies were not on it.
The move to remove Bitcoin (BTC) and its brothers from the agenda comes as a bit of a surprise, given that SEC chairman Gary Gensler has spoken many times about the need for more regulation of crypto assets.