Subject Authority Date Action Description
Blockchain of Things, Inc. Securities and Exchange Commission (SEC) 12/18/2019 Enforcement Action Blockchain of Things, Inc. (BCOT) settled charges of conducting an unregistered securities offering from December 2017 through July 2018 that raised over $12 million, agreeing to pay a $250,000 civil penalty.
Cease and Desist Order, Securities Act Release No. 10736
Waiver Order
Block.one Securities and Exchange Commission (SEC) 9/30/2019 Enforcement Action Block.one settled charges of conducting an unregistered ICO that raised several billion dollars over approximately one year, agreeing to pay a $24 million civil penalty.
Cease and Desist Order, Release No. 10714
SEC Press Release
ICO Rating Securities and Exchange Commission (SEC) 8/20/2019 Enforcement Action ICO Rating, an unincorporated organization formed in September 2016 and based in St. Petersburg, Russia, provided review and rating services for entities conducting ICOs, without being registered with the SEC in  any capacity. The SEC ordered ICO Rating to cease and desist from violating Section 17(b) of the Securities Act by touting ICOs involving the sale of securities and to pay disgorgement of $100,572, prejudgment interest of $6,426, and a civil money penalty of $162,000.
Cease and Decease Order, Securities Act Release No. 10673
Kik Securities and 6/4/2019 Enforcement Action The SEC sued Kik Interactive Inc. for
Exchange conducting an illegal $100 million securities
Commission offering of digital tokens in 2017, charging
(SEC) that Kik sold the tokens to U.S investors without registering their offer and sale.
U.S. Securities and Exchange Commission
v. Kik Interactive Inc., Docket No. 1:19- cv-05244 (S.D.N.Y. Jun 04, 2019)
SEC Press Release
Gladius Securities and Exchange Commission (SEC) 2/20/2018 Enforcement Action The SEC and Gladius Network LLC settled charges that Gladius conducted an unregistered securities offering in an ICO in October 2017-February 2018.
Gladius self-reported its ICO in summer 2018 after evaluating the applicability of federal securities laws and cooperated with the SEC to remedy its registration problems, and as a result, the SEC did not assess any civil money penalties.
Cease and Desist Order SEC Press Release
Securities and Exchange Commission v. AriseBank et al, Docket No. 3:18-cv-00186 (N.D. Tex. Jan 25, 2018)
Bitconnect Federal Bureau of Investigation (FBI) 2/20/2019 Criminal Investigation The FBI’s Cleveland field office announced on February 20 that it is seeking victims of the cryptocurrency investment scheme Bitconnect, for its investigation into the alleged Ponzi scheme that collapsed in January 2018.
Press Release Questionnaire
AriseBank Securities and Exchange Commission (SEC) 12/11/2018 Enforcement Action Two former executives behind the allegedly fraudulent ICO of AriseBank were ordered to pay nearly $2.7 million and prohibited from serving as officers or directors of public companies or participating in future offerings of digital securities.
Final Judgment as to Defendants Jared Rice Sr. and Stanley Ford
SEC Press Release
Securities and Exchange Commission v. AriseBank et al, Docket No. 3:18-cv-00186 (N.D. Tex. Jan 25, 2018)
CoinAlpha Securities and Exchange Commission (SEC) 12/7/2018 Enforcement Action CoinAlpha Advisors LLC, which formed the unregistered digital asset investment fund CoinAlpha Falcon LP in October 2017 and raised approximately $600,000 from 22 investors, then voluntarily unwound the fund in October 2017 after being contacted by
Commission staff, agreed to a cease and desist order and paid a $50,000 civil fine.
In the Matter of CoinAlpha Advisors LLC, ReleaseNo. 33-10582
N/A Securities and Exchange Commission (SEC) 12/3/2018 Speech SEC Division of Enforcement Co-Director Steven Peikin stated in a speech on international cooperation and SEC enforcement actions that international cooperation is critical to the SEC’s ability to investigate and recommend that the Commission bring enforcement action, citing the example of the emergency asset freeze to halt the PlexCorps ICO fraud in December 2017, and that the SEC continues to work with international authorities to develop pending ICO investigations.
The Salutary Effects of International Cooperation on SEC Enforcement
Celebrity ICO Touting Securities and Exchange Commission (SEC) 11/29/2018 Enforcement Action The SEC concluded its first cases to charge touting violations involving ICOs, reaching settlements with professional boxer Floyd Mayweather Jr. and music producer Khaled Khaled (known as DJ Khaled) for failing to disclose payments they received for promoting investments in ICOs.
Mayweather and Khaled each received individual cease and desist orders and agreed to pay disgorgement, penalties and interest. Mayweather agreed to pay
$300,000 in disgorgement, a $300,000 penalty, and $14,775 in prejudgment interest. Khaled agreed to pay $50,000 in disgorgement, a $100,000 penalty, and
$2,725 in prejudgment interest. In addition, Mayweather agreed not to promote any securities, digital or otherwise, for three years, and Khaled agreed to a similar ban for two years. Mayweather also agreed to continue to cooperate with the investigation.
In the Matter of Floyd Mayweather Jr., Order Instituting Cease-and-Desist Proceedings
In the Matter of Khaled Khaled, Order Instituting Cease-and-Desist Proceedings
SEC Press Release: Two Celebrities Charged With Unlawfully Touting Coin Offerings
Blockvest United States District Court 11/27/2018 Denial of Motion for Preliminary Ruling on a motion for preliminary injunction by the SEC in its enforcement action
for the Southern District of California
Securities and Exchange Commission (SEC)
Injunction against Blockvest LLC and its founder, Reginald Buddy Ringgold, III, Securities and Exchange Commission vs. Blockvest, LLC et al, Docket No. 3:18-cv-02287 (S.D. Cal. Oct. 3, 2018), the U.S. District Court for the Southern District of California denied the motion, holding that whether tokens issued in Blockvest’s ICO were securities could not be determined by the court because there were disputed issues of fact.
Order Denying Plaintiff’s Motion for Preliminary Injunction
Airfox Paragon Coin Securities and Exchange Commission (SEC) 11/16/2018 Enforcement Action The SEC imposed its first civil penalties for failures to register ICOs as securities, announcing settled charges against CarrierEQ Inc. (Airfox) and Paragon Coin Inc, two companies that sold digital tokens in ICOs without registering the tokens as securities after the Commission warned that ICOs can be securities offerings in its DAO Report of Investigation.
Airfox Cease and Desist Order
Paragon Coin Cease and Desist Order
SEC Press Release: Two ICO Issuers Settle SEC Registration Charges, Agree to Register Tokens as Securities
Blockvest Securities and Exchange Commission (SEC) 10/3/2018 Enforcement Action The SEC obtained an emergency court order that halted a planned ICO which backers falsely claimed was approved by the SEC and also halted ongoing pre-ICO sales by the company, Blockvest LLC and its founder, Reginald Buddy Ringgold, III.
The SEC alleged that the defendants had promoted the ICO with false claims of SEC approval, false claims of approval by a fake agency called the “Blockchain Exchange Commission” that used a graphic similar to the SEC seal and the same address as SEC headquarters, and misrepresentations of connections to a well-known accounting firm, and that they continued their fraudulent conduct even after the National Futures Association (NFA) sent them a cease and desist letter to stop them from using the NFA seal and from making false claims about their status with the NFA.
Securities and Exchange Commission vs. Blockvest, LLC et al, Docket No. 3:18-
cv-02287 (S.D. Cal. Oct. 3, 2018)
Complaint
Press Release: SEC Stops Fraudulent ICO That Falsely Claimed SEC Approval
Diamonds Trading Investment House / First Options Trading Commodity Futures Trading Commission (CFTC) 9/28/2018 Enforcement Action The CFTC charged defendants Morgan Hunt, doing business as Diamonds Trading Investment House, and Kim Hecroft, doing business as First Options Trading, with fraudulent solicitation and other fraud. The CFTC alleged that the defendants engaged in a fraudulent scheme to solicit Bitcoin from members of the public, through false or misleading representations or omissions, to invest in trading products including leveraged or margined foreign currency contracts, binary options, and diamonds.
The CFTC alleged that the defendants impersonated a CFTC investigator and forged documents purportedly authored by the CFTC’s General Counsel and bearing the image of the CFTC’s official Seal as part of their fraudulent scheme.
Commodity Futures Trading Commission vs. Doe 1 et al, Docket No. 4:18-cv-00807 (N.D. Tex. Sept. 28, 2018)
Complaint
Press Release: CFTC Charge Two Defendants with Fraudulent Solicitation, Impersonation of a CFTC Investigator, and Forging CFTC Documents, All in Attempt to Steal Bitcoin
My Big Coin U.S. District Court for the District of Massachusetts 9/26/2018 Court Opinion The U.S. District Court for the District of Massachusetts denied a motion to dismiss the case brought by the CFTC in Commodity Futures Trading Commission v. My Big Coin Pay, Inc. et al, 1:18-cv-10077- RWZ (D. Mass. Jan. 16, 2018), in part by rejecting the argument that the allegedly fraudulent virtual currency My Big Coin was not a “commodity” within the meaning of the Commodity Exchange Act.
Commodity Futures Trading Commission v. My Big Coin Pay, Inc. et al, 1:18-cv-10077- RWZ, 2018 BL 349103 (D. Mass. Sept. 26,
2018).
TokenLot Securities and Exchange Commission (SEC) 9/11/2018 Enforcement Action The SEC and TokenLot LLC, a self- described “ICO Superstore,” and its owners settled charges that they acted as unregistered broker-dealers. This case was the SEC’s first charging unregistered
broker-dealers for selling digital tokens after the SEC issued The DAO Report in 2017, cautioning that those who offer and sell
digital securities must comply with the federal securities laws.
In the Matter of TokenLot, LLC, Lenny Kugel, and Eli L. Lewitt, Release Nos. 33-10543, 34-84075, IC-33221, File No.
3-18739 (September 11, 2018)
Press Release No. 2018-185, SEC Charges ICO Superstore and Owners With Operating As Unregistered Broker-Dealers
REcoin and Diamond Reserve Club U.S. District Court for the Eastern District of New York 9/11/2018 Judicial Holding The U.S. District Court for the Eastern District of New York held after “the parties engage[d] in a spirited debate that is undoubtedly premature” that “a reasonable jury could conclude that the facts alleged in the indictment satisfy the Howey test,” and that the question of whether the tokens issued in the ICOs in question were actually securities is a factual issue for a jury.
United States v. Zaslavskiy, No. 17-CR-647 (RJD) (E.D.N.Y. Sep. 11, 2018)
Crypto Asset Management Securities and Exchange Commission (SEC) 9/11/2018 Enforcement Action Crypto Asset Management (CAM) and its founder and sole principal consented to a cease and desist order and a civil money penalty of $200,000 in an SEC enforcement action.
CAM and Enneking had formed Crypto Asset Fund, LLC (CAF), a pooled investment vehicle investing in digital assets that had never registered with the SEC. CAM and Enneking had misrepresented to actual and prospective investors that CAF was the “first regulated crypto asset fund in the United States” and had filed a registration statement with the SEC.
In the Matter of Crypto Asset Management, LP and Timothy Enneking, Securities Act Release No. 10544, Investment Advisers Act Release No. 5004, Investment Company Act Release No. 33222, Administrative Proceeding File No. 3-18740
CabbageTech Commodity Futures Trading Commission (CFTC) 8/23/2018 Enforcement Action After a four day bench trial, on August 23 the U.S. District Court for the Eastern District of New York ordered Patrick K. McDonnell and Cabbage Tech, Corp. d/b/a Coin Drop Markets (CDM) to pay over $1.1 million in civil monetary penalties and restitution.
The court issued a 139 page memorandum describing CDM’s deceptive and fraudulent virtual currency scheme and relevant law.
CFTC filed the action on January 18, 2018, and the court had previously entered a preliminary injunction against the defendants.
CFTC Wins Trial against Virtual Currency Fraudster
Tomahawkcoin Securities and Exchange Commission (SEC) 8/14/2018 Enforcement Action The SEC obtained permanent officer-and- director and penny stock bars against David
T. Laurance, founder of Tomahawk Exploration LLC, for attempting to raise money through the sale of “Tomahawkcoin” tokens.
Promotional materials used inflated projections of oil production that were contradicted by the company’s own internal analysis and misleadingly suggested that Tomahawk possessed leases for drilling sites when it did not, and the materials described Laurance as having a “flawless background” without disclosing his prior criminal conviction for his role in fraudulent securities offerings. Tomahawk claimed that token owners would be able to convert Tomahawkcoins into equity and potentially profit from the anticipated oil production and secondary trading of the tokens. Although the ICO failed to raise money, Tomahawk issued tokens through a “Bounty Program” in exchange for online promotional services.
Without admitting or denying the SEC’s findings, Tomahawk and Laurance consented to a cease and desist order, and Laurance consented to an officer and director bar, penny stock bar, and a
$30,000 penalty.
In the Matter of Tomahawk Exploration LLC and David Thompson Laurance, Securities Act Release No. 10530, Securities Exchange Act Release No. 83839, Administrative Proceeding File No. 3-18641
SEC Bars Perpetrator of Initial Coin Offering Fraud
Titanium Blockchain Infrastructure Services Inc. Securities and Exchange Commission (SEC) 5/22/2018 Enforcement Action The SEC filed a complaint charging that Titanium Blockchain Infrastructure Services Inc. and its president Michael Allen Stollery, aka Michael Stollaire, lied about business relationships with the Federal Reserve and dozens of well-known firms in the promotion of an ICO by Titanium Blockchain that raised as much as $21 million from investors in and outside the U.S. The SEC obtained a court order on May 29 halting
the ongoing fraud and approving an emergency asset freeze and appointment of a receiver for Titanium Blockchain.
Securities and Exchange Commission v. Titanium Blockchain Infrastructure Services Inc. et al, Docket No. 2:18-cv-04315 (C.D.Ca. May 22, 2018)
SEC Obtains Emergency Order Halting Fraudulent Coin Offering Scheme
Centra Tech Department of Justice 4/20/2018 Criminal Charges The U.S. Attorney for the Southern District of New York unsealed a criminal complaint charging Raymond Trapani, the third co- founder of Central Tech, Inc., with securities fraud and wire fraud offenses in connection with a scheme to induce victims to invest more than $25 million in investments through material misrepresentations and omissions in connection with an ICO. Trapani was arrested and presented before the U.S. District Court for the Southern District of Florida, and the criminal complaint was removed from the Southern District of New York.
USA v. Trapani, Docket No. 0:18-mj-06195 (S.D.Fla. Apr 20, 2018)
Third Co-Founder Of Cryptocurrency Company Charged In Manhattan Federal Court With Scheme To Defraud Investors
Longfin Corp. Securities and Exchange Commission (SEC) 4/4/2018 Enforcement Action The SEC alleged violations of Section 5 of the Securities Act by Longfin Corp.; founder and CEO Venkata Meenavalli; Amro Izzelden Altahawi, president of a company operating a Reg A+ offerings platform website; Suresh Tammineedi, an affiliate of Meenavalli; and Dorababu Penumarthi, an affiliate of Meenavalli, by selling unregistered securities without an applicable exemption from December 2017 through March 2018. The complaint sought
(1) an order imposing an asset freeze on Altahawi, Tammineedi, and Penumarthi, directing an accounting and expedited discovery against all defendants, and directing the repatriation of all profits from the illegal stock transactions, (2) an order directing service of the summons and complaint upon the defendants, (3) an order against all defendants imposing a preliminary injunction against future violations of Section 5 of the Securities Act,
(4) an order finding that the defendants violated Section 5 of the Securities Act, (5) an order permanently enjoining the
defendants from future violations of Section 5 of the Securities Act, (6) an order for the defendants to disgorge all of the ill-gotten gains derived from the illegal stock transactions, (7) an order for the defendants to pay civil penalties pursuant to Section 20(d) of the Securities Act, and (8) an order granting such other relief as the court may deem just and proper.
Securities and Exchange Commission v. Longfin Corp. et al, Docket No. 1:18-
cv-02977 (S.D.N.Y. April 4, 2018)
SEC Obtains Emergency Freeze of $27 Million in Stock Sales of Purported Cryptocurrency Company Longfin
Centra Tech Securities and Exchange Commission (SEC) 4/2/2018 Criminal Charges The SEC charged two co-founders of a purported financial services start-up with orchestrating a fraudulent ICO that raised more than $32 million from thousands of investors in 2017. The co-founders of Centra Tech Inc., Sohrab Sharma and Robert Farkas, conducted a fraudulent ICO in which Centra offered and sold unregistered investments through a “CTR Token.” The SEC filed a criminal complaint for violations of the anti-fraud and registration provisions of the federal securities laws against Sharma and Farkas, and in a parallel action, the U.S. Attorney’s Office for the Southern District of New York announced criminal charges against them.
USA v. Sharma et al, Docket No. 0:18- mj-06165 (S.D. Fla. Apr 02, 2018)
USA v. Farkas, Docket No. 0:18-mj-06166 (S.D. Fla. Apr 02, 2018)
Two Co-Founders Of Cryptocurrency Company Charged In Manhattan Federal Court With Scheme To Defraud Investors
Securities and Exchange Commission v. Sharma et al, Docket No. 1:18-cv-02909 (S.D.N.Y. Apr 02, 2018)
Press Release: SEC Halts Fraudulent Scheme Involving Unregistered ICO
Press Release: SEC Charges Additional Defendant in Fraudulent ICO Scheme
Three Companies Claiming Cryptocurrency Securities and Exchange Commission (SEC) 2/16/2018 Trading Suspensions The SEC suspended trading in three companies amid questions surrounding similar statements they made about the acquisition of cryptocurrency and
and Blockchain Asset Acquisitions blockchain technology-related assets. The SEC’s trading suspension orders stated that recent press releases issued by Cherubim Interests Inc. (CHIT), PDX Partners Inc. (PDXP), and Victura Construction Group Inc. (VICT) claimed that CHIT, PDXP, and VICT acquired AAA-rated assets from a subsidiary of a private equity investor in cryptocurrency and blockchain technology among other things. According to the SEC order regarding CHIT, it also announced the execution of a financing commitment to launch an ICO.
Trading Suspension Order – Cherubim Interests, Inc.
Trading Suspension Order – PDX Partners Inc.
Trading Suspension Order – Victura Construction Group Inc.
Press Release: SEC Suspends Trading in Three Issuers Claiming Involvement in Cryptocurrency and Blockchain Technology
AriseBank Securities and Exchange Commission (SEC) 1/25/2018 Court Order Halting ICO The SEC obtained a court order halting an allegedly fraudulent ICO that targeted retail investors to fund what it claimed to be the world’s first “decentralized bank.” Dallas- based AriseBank used social media, a celebrity endorsement, and other wide dissemination tactics to raise what it  claimed to be $600 million of its $1 billion goal in just two months. AriseBank and its co-founders Jared Rice Sr. and Stanley Ford allegedly offered and sold unregistered investments in their purported “AriseCoin” cryptocurrency by depicting AriseBank as a first-of-its-kind decentralized bank offering a variety of consumer-facing banking  products and services using more than 700 different virtual currencies. AriseBank’s sales pitch claimed that it developed an algorithmic trading application that automatically trades in various cryptocurrencies. The SEC alleges that AriseBank falsely stated that it purchased  an FDIC-insured bank which enabled it to offer customers FDIC-insured accounts and that it also offered customers the ability to obtain an AriseBank-branded VISA card to spend any of the 700-plus cryptocurrencies. AriseBank also allegedly omitted to disclose the criminal background of key executives. The SEC sought the appointment of a receiver in connection with an ICO fraud for the first time.
Securities and Exchange Commission v. AriseBank et al, Docket No. 3:18-cv-00186
Press Release No. 2018-8, SEC Halts Alleged Initial Coin Offering Scam
CabbageTech Commodity Futures Trading Commission (CFTC) 1/18/2018 Enforcement Action The CFTC filed a civil enforcement action against Patrick K. McDonnell and CabbageTech, Corp. d/b/a Coin Drop Markets (CDM), charging them with fraud and misappropriation in connection with purchases and trading of Bitcoin and Litecoin.
Commodity Futures Trading Commission v. McDonnell et al 1:18-cv-00361 (E.D.NY Jan. 18, 2018)
Press Release 7675-18, CFTC Charges Patrick K. McDonnell and His Company CabbageTech, Corp. d/b/a Coin Drop Markets with Engaging in Fraudulent Virtual Currency Scheme
My Big Coin Commodity Futures Trading Commission (CFTC) 1/16/2018 Enforcement Action The CFTC charged My Big Coin Pay, Inc. and individual defendants in New York, Michigan and Nevada with commodity fraud and misappropriation related to the sale of the virtual currency My Big Coin from at least January through January 2018.
Commodity Futures Trading Commission v. My Big Coin Pay, Inc. et al 1:18-cv-10077- RWZ
Press Release 7678-18, CFTC Charges Randall Crater, Mark Gillespie, and My Big Coin Pay, Inc. with Fraud and Misappropriation in Ongoing Virtual Currency Scam
Munchee, Inc. Securities and Exchange Commission (SEC) 12/11/2017 Order Finding Unregistered Securities Offer and Sale A company selling digital tokens to investors halted its ICO after the SEC contacted it and agreed to an order in which the SEC found that its conduct constituted unregistered securities offers and sales.
In the Matter of Munchee Inc., Release No. 33-10445, File No. 3-18304
Press Release No. 2017-227, Company Halts ICO After SEC Raises Registration Concerns
PlexCorps Securities and Exchange Commission (SEC) 12/4/2017 Enforcement Action The SEC’s Cyber Unit filed its first charges against a repeated securities law violator in Quebec and his company that were conducting an ICO that had raised up to
$15 million from thousands of investors
since August 2017 by falsely promising a 13-fold profit in less than a month. An emergency court order froze the assets of the company, its owner, and the owner’s partner. The SEC charged them with violation of the anti-fraud provisions and the registration provision of the U.S. federal securities laws.
The Autorité Des Marchés Financiers (AMF) of Quebec assisted the SEC with the investigation and initiated its own action against PlexCorps in August 2017.
SEC v. PlexCorps, E.D.N.Y. 1:17-cv-07007- CBA-RML, 12/1/17
Press Release No. 2017-219, SEC Emergency Action Halts ICO Scam
REcoin Group Foundation, LLC Department of Justice (DOJ) 10/27/2017 Enforcement Action DOJ charged Maksim Zaslavskiy with securities fraud conspiracy in connection with engaging in illegal unregistered securities offerings and fraudulent conduct and misstatements designed to deceive investors as part of two ICOs conducted through two of his companies, REcoin Group Foundation, LLC (REcoin) and DRC World, Inc.
USA v. Zaslavskiy, E.D.N.Y., 1:17-cr-00647
Brooklyn Businessman Charged with Fraud in Connection With Two Initial Coin Offerings
REcoin Group Foundation, LLC Securities and Exchange Commission (SEC) 9/29/2017 Enforcement Action The SEC alleged that a man in Brooklyn,
N.Y. named Maxim Zaslavskiy and his two companies defrauded investors in ICOs purportedly backed by investments in real estate and diamonds, which were sales of unregistered securities in companies with no real operations.
SEC v. REcoin Group Foundation, LLC, E.D.N.Y., 1:17-cv-5725
Press Release No. 2017-185, SEC Exposes Two Initial Coin Offerings Purportedly Backed by Real Estate and Diamonds
<img ” width=”552″ height=”3″ style=”display:none”>