Ever wonder how much the SEC has made from the 2017 post-DAO blockchain hysteria? It looks to me like they have disgorged $2,581,000, fined $1,483,682 in civil penalties, and $38,429 in taxes.
Here’s a summary of the federal action:
Munchee, Inc. December 11, 2017: Founders agreed to return $60,000 to 40 community members. Munchee stated in their white paper that they were not a Security, and aggressively promoted their ICO claiming MUN tokens could achieve 199% gains. See https://www.sec.gov/news/press-release/2017-227.
Centra Tech, Inc. April 2, 2018: The SEC filed this case against founders Sam Sharma, Robert Farkas, and Raymond Trapani, but it is stayed until the criminal trial is concluded. Centra Tech allegedly lied to investors about their product being associated with Visa, Mastercard and Bancorp, said they had 38 Money Transmission licenses, and made up a fake advisory board. See https://www.sec.gov/news/press-release/2018-53.
Titanium Blockchain Infrastructure Services, Inc. May 29, 2018: Results are pending in Federal District Court in LA. Titanium lied about business relationships with the Federal Reserve, Paypal, Verizon, Boeing and others. They compared investing in their ICO to investing in Google. See https://www.sec.gov/news/press-release/2018-94.
UBI Blockchain Internet, Ltd. July 2, 2018: The SEC filed this case in New York. An attorney and his law firm’s business manager made $1.4 million selling restricted shares for $21–48 when they were restricted to a price of $3.70. The price shot up after “blockchain” was added to the name. Defendants agreed to return $1.4 million of their ill-gotten gains, and pay $188,682 in penalties, subject to court approval. See https://www.sec.gov/news/press-release/2018-126.
Tomahawk, August 14, 2018: The founder was ordered to pay a civil penalty of $30,000. He made false claims that he had an oil drilling license and that token owners could convert their air dropped tokens into equity to profit from the proposed oil production and trading. The marketing material said the founder had a “flawless track record” and failed to disclose his prior criminal convictions for fraudulent securities offerings. See https://www.sec.gov/litigation/admin/2018/33-10530.pdf.
Crypto Asset Management, LLC, September 11, 2018: This hedge fund falsely represented that they were the first regulated crypto asset fund in the US. They agreed to the SEC’s cease-and-desist order and paid a penalty of $200,000. See https://www.sec.gov/news/press-release/2018-186.
Token Lot, September 11, 2018: This unregistered broker dealer handled thousands of investor orders for ICOs. They agreed to a $471,000 disgorgement penalty and prejudgment interest of $7,929. Each of the website’s founders, Kugel and Lewitt were assessed a civil penalty of $45,000. See https://www.sec.gov/litigation/admin/2018/33-10543.pdf.
CEO of 1Broker, September 27, 2018: 1Broker, a company registered in the Republic of the Marshall Islands, and its CEO Patrick Brunner, of Austria, allegedly solicited investors from the United States and around the world to buy and sell security-based swaps. Brunner allegedly failed to register a national securities exchange to sell the security-based swaps. The last update on Pacer is that he has waived the requirement for service. The Answer to the SEC’s complaint is due December 10, 2018.
Blockvest, LLC, October 11, 2018: Blockvest falsely claimed to have SEC approval and created a fake agency with a similar logo to the SEC’s calling it the “Blockchain Exchange Commission.” The SEC sought civil penalties and disgorgement of ill-gotten gains. Blockvest fought back and it’s progressing in the Southern District of California. See https://www.sec.gov/news/press-release/2018-232. Attorney Marco Santori had some interesting comments on the November 27, 2018 order denying SEC’s motion for preliminary injunction. See https://twitter.com/msantoriesq/status/1068246911533092866?s=12.
EtherDelta, November 8, 2016: Without admitting or denying the findings, EtherDelta’s founder, Zachary Coburn, consented to the order and agreed to pay $300,000 in disgorgement plus $13,000 in prejudgment interest and a $75,000 penalty. See https://www.sec.gov/news/press-release/2018-258.
Airfox and Paragon, November 16, 2018: SEC Ordered each ICO to pay $250,000 penalties & undertakings to compensate harmed investors who purchased tokens in the illegal offerings. The companies have to register their tokens as securities pursuant to the Securities Exchange Act of 1934 and file periodic reports with the Commission for at least one year. See https://www.sec.gov/news/press-release/2018-264
Flloyd Mayweather & DJ Khaled, November 29, 2018: In connection with Centra Tech promotion, Mayweather agreed to pay $300,000 in disgorgement, a $300,000 penalty, and $14,775 in prejudgment interest. DJ Khaled agreed to pay $50,000 in disgorgement, a $100,000 penalty, and $2,725 in prejudgment interest. See https://www.sec.gov/news/press-release/2018-268
What’s coming next?