SEC imposes fees on 2 crypto companies and 4 individuals for their involvement in the pump and dump program
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Answer SEC imposes fees on 2 crypto companies and 4 individuals for their involvement in the pump and dump program
I told The US Securities and Exchange Commission (SEC) said Friday that it has indicted two crypto companies and four individuals allegedly involved in a scheme to pump and dump cryptocurrency prices.
The companies are Bermuda-based Arbitrade Ltd and Canadian Cryptobontix Inc. The other defendants are their directors Troy RJ Hogg, James L. Goldberg, Stephen L. Braverman and Max W. Barber, founder and sole owner of SION.
The defendants allegedly committed a pump-and-dump scheme involving cryptocurrency, the SEC explained, adding:
Although this case includes cryptocurrencies, it bears the hallmarks of the classic pump and dump system.
Read:Cryptocurrency exchange under investigation after $200,000 fraud
The SCA explained that between May 2018 and January 2019, the two companies, through the four defendants, issued advertisements falsely claiming that Arbitrade had acquired and obtained $10 billion in gold bullion.
They also claimed that the company intended to subsidize every DIG token issued and sold to investors for $1.00 worth of this gold, and that independent accounting firms audited and verified the gold.
The SEC told:
In fact…the gold takeover was just a ruse to increase the demand for DIG.
This allowed the defendants to sell at least $36.8 million in crypto, including to US investors.
Prices fraudulently inflated due to public misrepresentations about the supposed acquisition of gold.
The regulator added:
The complaint accuses the defendants of violating the anti-fraud and securities registration provisions of federal securities laws.
The Securities and Exchange Commission (SEC) is seeking permanent injunctive relief through its lawsuit against these parties.
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