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 of finance and cryptography.
SEC Charges 2 Firms and 4 Individuals in Crypto Pump-and-Dump Scheme – Regulation Bitcoin News
The US Securities and Exchange Commission (SEC) has taken action against two firms and four individuals who allegedly engaged in a crypto pump-and-dump scheme. “Although this case involves cryptoassets, it bears the hallmarks of a classic pump and dump scheme,” the SEC said.
SEC Charges 2 Firms in Crypto Pump-and-Dump Case
The US Securities and Exchange Commission (SEC) said on Friday that it has filed charges against two firms and four individuals who allegedly engaged in a cryptocurrency pump-and-dump scheme.
The two companies are Bermuda-based Arbitrade Ltd. and the Canadian firm Cryptobontix Inc. The other defendants are their principals – Troy RJ Hogg, James L. Goldberg and Stephen L. Braverman – and Max W. Barber, founder and sole owner of SION Handel. SION has been appointed as an auxiliary defendant in the case.
The defendants allegedly conducted a “pump-and-dump scheme involving a crypto-asset called ‘dignity’ or ‘DIG’,” the SEC said in detail, 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 conducted an ‘audit’ of the gold and confirmed its existence.”
The SEC said:
In reality… the gold purchase transaction was just a sham to increase demand for DIG.
This allowed the defendants to sell at least $36.8 million of the crypto token, including to US investors, “at prices fraudulently inflated by public misrepresentations of the supposed gold purchase,” the SEC said in detail.
The regulator added:
The SEC’s complaint accuses the defendants of violating the anti-fraud 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 restraints against the individual defendants.”
What do you think about the SEC cracking down on this crypto pump-and-dump scheme? Let us know in the comments section below.
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