SEC Cracks Down On Titan Global’s Crypto Advertising Deception: $1.04M Penalty Imposed

Key Points:

• The SEC charges Titan Global Capital for misleading crypto asset advertising and compliance lapses.
• Titan’s exaggerated “annualized” performance figures lacked key context, leading to SEC action.
• Titan is to pay $1.04 million in penalties and compensation, emphasizing the SEC’s investor protection focus.

The Securities and Exchange Commission (SEC) has taken action against Titan Global Capital Management USA LLC, a New York-based FinTech investment adviser, for engaging in misleading practices and multiple compliance failures.

The SEC‘s charges stem from Titan’s use of misleading hypothetical performance metrics in its advertisements, along with various breaches in compliance standards.

During the period from August 2021 to October 2022, Titan, known for its intricate investment strategies accessible through a mobile trading app, promoted exaggerated performance outcomes on its website.

Among these, the “annualized” performance figures for its Titan Crypto strategy reached an astonishing 2,700 percent. The commission found these advertisements deceptive for not disclosing crucial information, such as the assumption that the strategy’s initial three-week performance could be maintained for an entire year.

In response to the investigation, Titan cooperated and agreed to the commission’s findings. The company consented to a cease-and-desist order and accepted censure. Furthermore, Titan will pay $192,454 in disgorgement and prejudgment interest, along with a civil penalty amounting to $850,000. This penalty will be distributed to the clients affected by these violations.

The investigation also revealed Titan’s violations of the marketing rule established by the SEC. Titan advertised hypothetical performance metrics without having the necessary policies and procedures in place, as mandated by the commission’s marketing rule amendments from December 2020.

Additionally, the SEC found that Titan conveyed inconsistent information about how it stored clients’ crypto assets, included misleading liability disclaimer language in client advisory agreements, and failed to adopt appropriate policies for employee personal trading in crypto assets.

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