The Authority for the financial industry has issued its first disciplinary action concerning cryptocurrencies.
On Tuesday, Finra, a self-regulating organization, filed a lawsuit against Timothy Tilton Ayre, claiming to have committed fraud with titles and illegally distributed HempCoin, a cryptocurrency security focused on unregistered cannabis.
The complaint comes after scrutiny by regulators, including the Securities and Exchange Commission, as well as well-publicized scams and a large selloff in the cryptocurrency market.
Finra argues in the complaint that between January 2013 and October 2016, Mr. Ayre, of Agawam, Massachusetts, "attempted to attract public investment into its useless public company," Rocky Mountain Ayre Inc.
Mr. Ayre was not immediately reachable for comment.
The broker would have issued and sold HempCoin, which it advertised as "the first minimum currency backed by negotiable securities", and would have made fraudulent statements about the business and finances of Rocky Mountain Ayre, according to the complaint. The company was listed on the pink market of
OTC market group
and he was exchanged at the desk.
Mr. According to the complaint, Ayre would have purchased Hemp Coin rights and would reorganize in June 2015 as a guarantee backed by an escort in Rocky Mountain Ayre. The broker would have marketed HempCoin as equivalent to 0.10 shares of the publicly traded company, said Finra.
Until the end of 2017, investors extracted over 81 million hemp and bought and sold the securities on two cryptocurrency bags. Mr. Ayre did not register HempCoin, said Finra.
According to the rules of Finra, a company or individual named in a complaint can file an answer and request an audition before a disciplinary panel of Finra. Possible actions include a fine, a censorship, a suspension or a bar from the securities industry, a revaluation of the gains associated with the violations and the payment of the refund.
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