SEC charges crypto company with fraud and anti-registration violations
On November 1, the SEC charged a crypto company and its executive team with fraud through the unregistered sale of crypto asset securities. According to the complaint, the defendants represented in marketing materials, website, social media posts, and other communications with the public that a certain percentage of funds for each transaction would be retained and inaccessible by any party for a period of four years as a safety mechanism against asset misappropriation. Instead, the complaint alleges, the defendants accessed the funds and misappropriated tens of millions of dollars for various purposes, including manipulation of the market for the crypto asset, business expenses, investments in unrelated companies, and personal use. The complaint charges defendants with violating the registration and anti-fraud provisions of the Securities Act of 1933 and the anti-fraud provisions of the Securities Exchange Act of 1934.