Securities and exchange commission (SEC) today charged two cryptocurrency startups for defrauding investors by offering unregistered digital asset securities. The alleged fraudsters used two crypto firms Start Options and Bitcoiin2Gen to offer securities worth around $11 Million.
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SEC charged Start Options and Bitcoiin2Gen founder Kristijan Krstic and John DeMarr, primary promoter of both the companies for deceiving investors and offering them unregistered digital securities through both these firms.
As per the complaint both the individuals in January 2018, promoted unregistered digital security called B2G token via initial coin offering (ICO). One more individual Robin Enos has also been charged for aiding and abetting the antifraud violations. Kristina Littman, Chief of the SEC Enforcement Division’s Cyber Unit said,
“The conduct alleged in this action was a blatant attempt to victimize those interested in digital asset technology and these defendants should be held accountable. In reality, we allege, these ventures were fraudulent enterprises aimed simply at misappropriating funds from investors.”
The complaint alleges the individuals misinformed investors over claims about B2G token as well as the exchange start options. In one of the promotions they falsely claimed start options as one of largest bitcoin exchange in euro volume and liquidity. They also claimed B2G token will be launched on Ethereum Blockchain and the invested funds will be used to create a mineable coin.
SEC alleges that Bitcoiin2Gen was a sham and alleged culprits utilized investors funds for their personal benefits and usage.