The United States Securities and Exchange Commission charged Virginia-based Boontech and CEO, Rajesh Pavithran for fraud and registration violations. The charges emerged after Tech and its chief executive officer Rajesh Pavithran were caught for fraud and registration violations in connection with a $5 million initial coin offering (ICO) of digital asset securities, according to an official media release.
According to the SEC’s order, 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 develop and market a platform to connect employers posting jobs with freelancers seeking work, the release said.
It further mentioned that the order finds that the Boon Coins were offered and sold as investment contracts and were therefore securities, and that Boon.
Further, the order finds that Pavithran and Boon.Tech made false and misleading statements, including claims that Boon Coins were stable and secure because Boon.
The order also finds that Boon.Tech and Pavithran misrepresented to investors that Boon.Tech’s platform was faster and more scalable than its competitors because it was built on Boon.Tech’s own blockchain, when in reality the platform was being developed on the same public blockchain as its competitors.
“Investors are entitled to truthful disclosures from issuers of securities, whether digital or otherwise,” said Kristina Littman, Chief of the SEC Enforcement Division’s Cyber Unit.
“Pavithran and Boon.Tech defrauded investors by convincing them to fund this endeavor based on the allure of innovation that simply did not exist.”
The SEC’s order finds that Boon.Tech and Pavithran violated the antifraud and registration provisions of the federal securities laws.