- Charges have been brought by the Securities and Exchange Commission (SEC) against Bermuda-based Arbitrade, Canadian-based Cryptobontix, and their owners.
- The aforementioned businesses are accused of deceiving investors by using false assertions in their promotional materials.
According to the Ontario Securities Commission, Troy Richard James Hogg has been accused of participating in a crypto token offering that raised US$51 million.
According to the statement of charges, Hogg, an Ontario citizen, advertised and sold a cryptocurrency asset called Dignity token—previously known as Unity Ingot—to investors all over the world between May 2017 and June 2019.
Based on the statement, the SEC asserted that the two businesses misrepresented Arbitrade’s acquisition of gold bullion, the backing of the DIG tokens with this gold, and the independent accounting firm’s confirmation of the gold’s existence.
Then, according to the press announcement, they sold $36.8 million worth of DIG “at prices falsely inflated by the public misstatements about the claimed gold purchase.”
The OSC additionally asserted that Hogg and the firms used investor funds for things unrelated to the DIG coins, including payments to companies he managed and the purchase of the real estate. It underlines once more that Hogg failed to notify the OSC of a DIG token sale.
The regulator further asserts that Hogg failed to register with the OSC or submit a prospectus for the token in order to participate in trading activities.
The agencies are asking the courts in their respective domains to impede the companies’ operations, order them to return any gains obtained illegally, ban the executives and companies from holding positions similar to theirs, and impose other financial penalties that have not yet been determined.
David Staubitz and Crystal Ivory from the Miami Regional Office of the SEC carried out the investigation, which was overseen by Chedly C. Dumornay, Fernando Torres, and Glenn S. Gordon.
Alice Sum and Teresa Verges will be in charge of and oversee the SEC’s legal action. The Ontario Securities Commission’s help is recognized by the SEC.
The complaint calls for “civil penalties, disgorgement with prejudgment interest, officer-and-director bars, and permanent injunctive relief against each and every defendant.“
When it comes to taking legal action against fraudulent cryptocurrency businesses and operations, the SEC is highly proactive.
The commission recently filed a lawsuit against two crypto advising businesses and their owner for allegedly taking part in the misappropriation of investors’ money that was intended for investment in digital assets. The federal district court in Manhattan received the charges.
Gabriel Edelman is the proprietor of the two crypto advising companies being sued: Creative Advancement LLC and Edelman Blockchain Advisors.