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SEC

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On September 21, 2020, the U.S. Office of the Comptroller of the Currency (OCC), the regulatory agency charged with overseeing banks, published an interpretive letter clarifying national banks’ and federal savings associations’ authority to hold “reserves” on behalf of customers who issue certain stablecoins. Generally, a stablecoin is a type of cryptocurrency designed to have a stable value as compared with other types of cryptocurrency, which frequently experience significant volatility. One type of stablecoin is…

On September 15, 2020, the U.S. Securities and Exchange Commission announced charges against Unikrn Inc., an operator of an online eSports gaming and gambling platform for conducting an unregistered initial coin offering (ICO) of digital asset securities. Unikrn agreed to settle the charges by paying a $6.1 million penalty, substantially all of the company’s assets, to be distributed to investors through a Fair Fund. According to the SEC’s order, between June and October 2017, Unikrn raised approximately…

On August 13, 2020, the U.S. Securities and Exchange Commission announced charges against Virginia-based Boon.Tech and its chief executive officer Rajesh Pavithran for fraud and registration violations in connection with a $5 million initial coin offering of digital asset securities.  According to the SEC’s from November 2017 to January 2018, Boon.Tech and Pavithran raised approximately $5 million by selling Boon Coins to more than 1,500 investors in the U.S. and worldwide to raise funding to…

On July 13, 2020, the U.S. Securities and Exchange Commission charged California-based Abra (a crypto investment app maker) and a related firm in the Philippines for offering and selling security-based swaps to retail investors without registration and for failing to transact those swaps on a registered national exchange. In a parallel action, the U.S. Commodity Futures Trading Commission issued an order filing and settling charges against both companies for entering into illegal off-exchange swaps in…

On June 25, 2020, the U.S. Securities and Exchange Commission charged NAC Foundation, its Chief Executive Officer Marcus Andrade, and political lobbyist Jack Abramoff with conducting a fraudulent, unregistered offering of AML BitCoin, a digital asset security the defendants claimed was a new and improved version of bitcoin. The SEC alleges that Nevada-based NAC Foundation raised at least $5.6 million from more than 2,400 investors by selling tokens that could later be converted to AML…

The U.S. Securities and Exchange Commission announced on June 19, 2020 that it had filed an emergency action and obtained a temporary restraining order and asset freeze against two Pennsylvania-based brothers and three entities they control to stop an offering fraud and the misappropriation of investor proceeds. According to the SEC’s complaint, from at least July 2019 through May 2020, brothers Sean Hvizdzak and Shane Hvizdzak offered securities in a private fund that purported to invest in…

On June 5, 2020, the U.S. Securities and Exchange Commission unsealed a complaint it had filed on May 7, 2020 in Salt Lake City, Utah against Daniel F. Putnam, Jean Paul Ramirez Rico and Angel A. Rodriguez, as well as their company, MMT Distribution. The SEC also announced that it obtained an asset freeze and other emergency relief against the Defendants. The SEC’s complaint, alleges that, beginning in at least July 2017, Putnam operated a multilevel…

On May 28, 2020, the U.S. Securities and Exchange Commission announced charges against blockchain services company BitClave PTE Ltd. for conducting an unregistered initial coin offering of digital asset securities. In June 2017, BitClave began marketing the development of a platform called the BitClave Active Search Ecosystem (“BASE”). BitClave advertised that on BASE, once developed, customers would receive a digital asset the company created, CAT, in exchange for viewing and interacting with targeted ads. Around…

We previously reported here and here about the case the U.S. Securities and Exchange Commission brought against Telegraph. In March, Judge Kevin Castel of the Southern District of New York granted the SEC’s preliminary injunction request preventing the distribution to purchasers of $1.7 billion worth of cryptocurrency called “Grams,” which were going to be allotted upon the launch of Telegram’s TON blockchain. Judge Castel then denied Telegram’s request that the injunction be limited so as not…

On April 24, 2020, the U.S. Securities and Exchange Commission brought suit in federal district court in California, charging Dropil, Inc. and its three founders, Jeremy McAlpine, Zachary Matar, and Patrick O’Hara, with defrauding investors in a fraudulent and unregistered initial coin offering (ICO) that raised more than $1.8 million from about 2500 investors. As the SEC announced, according to the complaint, from at least January to March 2018, Dropil sold DROP tokens, claiming that…