SEC Imposes New Strict Penalties Against Crypto Fraudster Companies.

SEC Imposes New Strict Penalties Against Crypto Fraudster Companies.

2018-09-12 | Eddy Morgan

SEC Imposes New Strict Penalties Against Crypto Fraudster Companies.

The regulatory authority ‘SEC’ alleged that Crypto Asset Management L-P ‘CAM’ and its owner ‘Timothy Enneking’, had marketed itself underneath false pretences, alleging that Enneking raised over more than $3 Mln later in year 2017 and even falsely claimed that the company was "the first regulated crypto asset fund in the United States.”

According to the SEC’s statement, Enneking and his company agreed to the SEC's cease-and-desist order and would be paying a penalty of $200,000 USD, while not admitting or denying the agency's findings.

Although this is not the only time the SEC has issued cease-and-desist letters to companies in operation within the crypto ecosystem, it's the first that found faulty with registration statements created by a digital currency investment trust.

Rather than this, the SEC defendants TokenLot LLC and its owners, Lenny Kugel, and Eli L. Lewitt, were also involved in an illicit act as per unregistered broker-dealers. The agency aforesaid that TokenLot – represented as a sort of "ICO Superstore" – "received orders from over 6,000 retail investors and handled over two hundred different crypto tokens, that the SEC found enclosed securities."

As within the case of CAM, Kugel, Lewitt and TokenLot did not conform to or deny the SEC's findings, however have agreement to pay $471,000  USD in emesis including $7,929 USD in interest.

Lewitt and Kugel will be also paying $45,000 USD each in penalties and "agreed to business and stockbars and an investment trust prohibition with the right to re register after a time interval of three years.”

Steven Peikin, co-director of the SEC's Enforcement Division aforesaid during a statement mentioning that:

"The penalties induced in this case replicate the prompt cooperation and remedial actions by TokenLot, Kugel, and Lewitt.“

Notably, their cope with the SEC additionally states that they're going to discover "a free third party to destroy TokenLot's remaining inventory of digital assets." however how this method is to be played out is still unclear at this time.

Both the SEC orders documented its 2017 DAO report, that is making up a way for a series of SEC  ecforcement control actions against alleged fraudsters within the ICO pace. At the time, the agency aforesaid that securities law within the U.S. could apply to token sales.

For the detailed SEC’s Order, please refer here.

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