Securities and Exchange Commission (SEC) has indicted a couple of men for their involvement in making millions of fraudulent offers. case is already solved.
SEC charged two Florida men with using a Cayman Islands company to illegally obtain $ 30 million. case was the SEC’s first in the DeFi industry.
In a press release from the SEC, the agency said the couple, Gregory Keough and Derek Acree, are executives at Blockchain Credit Partners. allegations stemmed from the two’s misleading statements and the sale of $ 30 million in unrecorded securities through smart contracts. Acree and Keough used the DeFi money market from February 2020 to February 2021 to sell the securities. Two types of digital tokens were used in the operation, mToken and DMG token. «MTokens that could be purchased using specified digital assets and paid 6.25% interest; and “government tokens” from DMG that allegedly conferred certain voting rights, excess profit sharing and the ability to derive the proceeds from DMG government token resales on the secondary market. “Said the SEC.
order goes on to explain that “respondents said that DeFi Money Market (DMM) could pay interest and earnings because it would use investors’ assets to buy ‘real world’ income-generating assets, such as auto loans.” After publicly presenting the DMM, the pair realized that it could not perform as promised because price volatility created the risk that income would not cover the main investment. Problems arose when the couple decided to omit this information from correspondence with investors, but they also lied about how the company operated. To try to cover their tracks, Acree and Keough used a separate company along with private funds to try to make interest payments on mToken refunds.
Also Read Who is Likely to Win the Race to Launch the First Bitcoin ETF in the US?
SEC reaction
SEC’s announcement includes quotes from numerous individuals, including the head of the Compliance Division’s Complex Financial Instruments Unit, Daniel Michael. “Federal securities laws apply with equal force to secular fraud involved in today’s latest technology. Here, labeling the offering as decentralized and the securities as governance tokens did not prevent us from ensuring that the DeFi money market was immediately closed and that investors were paid. ‘
Gurbir S. Grewal, Director of the SEC’s Compliance Division added: “Full and honest disclosure remains the cornerstone of our securities laws, regardless of the technologies used to offer and sell such securities. This enables investors to make informed decisions and prevents issuers from misleading the public about business transactions.
press release concludes by sharing that the case was settled by the defendant “without admitting or denying the findings in the SEC order.” couple agreed to a termination and termination order that includes fines of $ 125,000 each and reimbursement of ill-gotten gains totaling nearly $ 13 million between the two.
Disclaimer
All information on our website is published in good faith and for general information purposes only. Any action taken by the reader on the information found on our website is strictly at your own risk.
Source link
more
