The regulatory authority ‘SEC’ alleged that CryptoAssetManagementL-P‘CAM’ and its owner ‘Timothy Enneking’, had marketed itselfunderneathfalse pretences, alleging that Enneking raisedover more than$3 Mln later in year 2017 and even falsely claimed thatthe companywas “thefirstregulated cryptoassetfundin theUnited States.”
According to the SEC’s statement, Ennekingand hiscompany agreedto the SEC’s cease-and-desist orderand would bepaying a penalty of $200,000 USD,while notadmitting or denying the agency’s findings.
Althoughthis is notthe only time the SEC has issued cease-and-desist letters tocompaniesin operation within thecryptoecosystem,it’sthe firstthat found faulty with registration statementscreatedby a digital currencyinvestment trust.
Rather than this, the SECdefendantsTokenLot LLC and itsowners, Lenny Kugel, and Eli L. Lewitt, were also involved in an illicit act as per unregistered broker-dealers. The agencyaforesaidthat TokenLot –representedasa sortof “ICO Superstore” – “received orders fromover 6,000 retail investors andhandledovertwo hundred differentcrypto tokens,thatthe SEC foundenclosedsecurities.”
Aswithin thecase of CAM, Kugel, Lewitt and TokenLotdid notconform toor deny the SEC’s findings,however have agreementto pay $471,000 USD inemesisincluding$7,929 USD in interest.
Lewitt and Kugelwill be also paying $45,000 USD each in penaltiesand “agreed tobusinessandstockbars and aninvestment trustprohibition withthe rightto re registerafter a time interval of three years.”
Steven Peikin, co-director of the SEC’s Enforcement Division aforesaid during a statement mentioning that:
“The penaltiesinduced in thiscasereplicatethe prompt cooperation and remedial actions by TokenLot, Kugel, and Lewitt.“
Notably, theircope withthe SECadditionallystates thatthey’re going todiscover“afreethird party to destroy TokenLot’s remaining inventory of digital assets.”however howthismethodis to beplayed out is still unclear atthis time.
Both the SEC ordersdocumentedits 2017 DAO report,that is making up a way for a series of SEC ecforcement controlactions against alleged fraudsterswithin theICOpace. At the time, the agencyaforesaidthatsecurities lawwithin theU.S.couldapply to token sales.
For the detailed SEC’s Order, please refer here.