SEC Halts Initial Coin Offering

In a first enforcement action against an Initial Coin Offering (ICO), the Securities and Exchange Commission obtained an emergency asset freeze to stop a the sale of “Plexcoins.”

Although the action was against alleged serial Canadian fraudsters, it marks the first take down of a token offering by the SEC’s new Cyber Unit that was first organized in September.

And guess what, the complaint filed in Brooklyn Federal Court alleges violation of the registration provisions of the Securities Act of 1933. No surprise as Chairman Clayton said a few weeks ago that he hasn’t yet seen an ICO that wasn’t a securities offering.

A novel remedy requested in this case is a bar of the defendants from being involved in further offerings of “digital securities” – a term newly coined (pun intended) by the regulators.

About JeffKoeppel

I am a corporate/securities attorney in the Washington, DC area. Prior to joining the firm, I was a Senior Attorney Advisor in the Division of Corporation Finance at the U.S. Securities and Exchange Commission. I am a member of the Bars of the States of Maryland, New York and the District of Columbia. You can also follow this blog on LinkedIn at:
This entry was posted in accredited investor, balance, checkbook, Congress, Crowd Fund Act, Crowd Fund Act of 2012, Crowd Funding At the Margins, Crowd Funding Platforms, discrepancies, fraud, Funding Portals, Investments, Jobs, Legislative Intent, review, SEC, Small Business, technology, VC, Venture Capital, Wall Street and tagged , , , , , , , , , , , , , , , , , . Bookmark the permalink.

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