Pressing Charges
The United States Securities and Exchange Commission, or SEC, has pressed charges against the cryptocurrency issuer Loci Inc., the platform behind LOCI coin, and CEO John Wise.
The pressing charges for “making materially false and misleading statements.” As part of a non-registered securities offering conducted between August 2017 and January 2018. Providing additional evidence that regulators were still targeting the original coin, offerings from the last major market mania.
The Crime
The SEC has claimed that John Wise & Loci Inc. misled the investors. They lied regarding the company’s revenues, staff numbers, and user base during the $7.6 million crowd sale. According to the regulator, Wise has embezzled $ 38,163 from investors for personal needs.
That said, Sections 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, as well as Section 17(a) of the Securities Act of 1933, and Sections 5(a) and 5(c) of the Securities Act, were all breached by Wise and Loci Inc.
Kristina Littman’s comment
Kristina Littman, Chief of the SEC Enforcement Division’s Cyber Unit, commented on the case, “Loci and its CEO misled investors regarding critical aspects of Loci’s business. Investors in digital asset securities are entitled to truthful information and fulsome disclosures so they can make informed investment decisions.”
Consequences
Following the results, the US SEC fined the ICO issuer $7.6 million for their transgressions. They also barred Wise from serving as an officer or director. Wise, on the other hand, didn’t deny nor confirm the allegations made by the commission against him and Loci Inc.
Sanctions against cryptocurrency companies are nothing new for the US government. Since 2014, regulators from the Securities and Exchange Commission, the Commodity Futures Trading Commission, and the Financial Crimes Enforcement Network have imposed fines on cryptocurrency-related companies totaling more than $ 2.5 billion, highlighting the murky regulatory climate surrounding digital assets.
