The SEC undertakes an unprecedented legal action against two cryptocurrency companies – Live Coin Watch


This article was originally published on TheTokenist.

For much of 2018, the SEC has been more careful in controlling the cryptocurrency sector and has intensified the repression of companies and encrypted projects that do not comply. Among their first enforcement actions were held this month against TokenLot is Crypto Asset Management (ROOM).

TokenLot Gets the boot

On September 11, the SEC filed a lawsuit against the online platform TokenLot to be an unregistered broker-dealer. The SEC in its reasoning stated that from July 2017 to February 2018, TokenLot was selling itself as a broker and was responsible for the direct facilitation of a total of nine ICOs during this period.

The platform itself was a space in which individuals could be involved in ICOs. As such, they participated in the secondary sales of over 200 ICOs that were all listed on their website. Often, TokenLot claimed a profit by buying ICO tokens at a discounted price and sold them to their retail website for much higher prices.

Since TokenLot has never been registered with the SEC or as an intermediary, they have been charged. Their platform is now closed.

Another encrypted company charged the same day

Crypto Asset Management (CAM) was another company that filed a lawsuit against them on the same day as TokenLot.

CAM was responsible for their Crypto Asset Fund, which was an investment vehicle intended to aggregate some of the major cryptocurrencies into a single fund. From 1 August to 1 December 2017, the SEC claimed that CAM made about $ 3.6 million from 44 investors.

Rather than engaging through formal channels, CAM is engaged in solicitation through chats, social media accounts and the company website to raise their funds. Cam was charged with violating the securities laws. These included:

  • Sale of unregistered securities
  • Do not be registered as an investment company
  • Material misrepresentations and omissions

Because of these negligence, they were forced to pay $ 200,000 in civil penalties. All offers of their services have been stopped.

The bottom line

The reality is that today the SEC has been increasingly pressing when it comes to monitoring the cryptocurrency space.

Entities and individuals must understand that many of the cryptocurrency transactions they currently make, especially when dealing with ICO, involve the offer or sale of a security.

Although SEC officials claimed that Bitcoin and Ethereum are not securities, many of the tokens currently in circulation are because they are purely speculative.

Do you think the SEC is preparing to expand its repression? Is it time for a new concept of tokenized securities for an appropriate regulatory environment? Tell us in the comments below.

Image courtesy of Toshi Times.

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