SEC Charges 2 Firms and 4 Individuals in Crypto Pump-and-Dump Scheme
SEC Charges 2 Firms and 4 Individuals in Crypto Pump-and-Dump Scheme
The U.S. Securities and Exchange Commission (SEC) has taken action against two firms and four individuals allegedly perpetrating a crypto pump-and-dump scheme. “Although this case involves crypto assets, it bears the hallmarks of a classic pump and dump scheme,” said the SEC. SEC Charges 2 Firms in Crypto Pump-and-Dump Case
The U.S. Securities and Exchange Commission (SEC) said Friday that it has filed charges against two firms and four individuals allegedly perpetrating a cryptocurrency pump-and-dump scheme.
The two companies are Bermuda-based Arbitrade Ltd. and Canadian firm Cryptobontix Inc. The other defendants are their principals — Troy R. J. Hogg, James L. Goldberg, and Stephen L. Braverman — and Max W. Barber, founder and sole owner of SION Trading. SION is named a relief defendant in the case.
The defendants allegedly perpetrated a “pump-and-dump scheme involving a crypto asset called ‘dignity’ or ‘DIG,’” the SEC detailed, adding: Although this case involves crypto assets, it bears the hallmarks of a classic pump and dump scheme.
The securities watchdog explained that between May 2018 and January 2019, the two companies, through the four defendants, “issued announcements falsely claiming that Arbitrade had acquired and received title to $10 billion in gold bullion.”
They further claimed that “the company intended to back each DIG token issued and sold to investors with $1.00 worth of this gold, and that independent accounting firms had performed an ‘audit’ of the gold and verified its existence.”
The SEC said: In reality … the gold acquisition transaction was merely a sham to boost demand for DIG.
This allowed the defendants to sell at least $36.8 million of the crypto token, including to U.S. investors, “at prices fraudulently inflated by the public misstatements about the supposed gold acquisition,” the SEC detailed.
The regulator added: The SEC’s complaint charges the defendants with violating the antifraud and securities registration provisions of the federal securities laws.
The SEC “seeks permanent injunctive relief, disgorgement plus prejudgment interest, and civil penalties against all of the defendants, and officer-and-director bars against the individual defendants.” Tags in this story crypto pump-and-dump, crypto pump-and-dump schemes, SEC, sec enforcement action
What do you think about the SEC taking action against this crypto pump-and-dump scheme? Let us know in the comments section below. Kevin Helms
A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography. US Lawmakers Introduce Bill Allowing Crypto Investments in 401(k) Retirement Plans REGULATION | 21 hours ago US State Issues Order Freezing Crypto at Exchanges in Pig Butchering Scam Crackdown REGULATION | 23 hours ago
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