- After the SEC hinted that it seeks more regulatory power over the crypto industry, it has constantly grown strict, chagrin another founder and its two companies for delusive statements related to a $40.7 million ICO.
- The SEC further claimed that the involved organizations diverted an amount of $5.8 million from the ICO funds towards the gold mining entities of South Africa.
- A recent report from Chainalysis revealed that a massive increase in illegal activities related to cryptocurrencies had been observed in 2021. Also, the SEC warned all individuals related to illegal activities in the crypto ecosystem that the SEC will reach them soon.
The SEC (Securities and Exchange Commission) has recently announced new charges against an Australian founder and his two organizations with regards to a $40.7 million ICO (Initial Coin Offering). In the recent release, the SEC held up two companies, Metavine Inc and Crowd Machine Inc, and their founder Craig Sproule based on materially incorrect and delusive statements.
The SEC claimed that in an asset securities’ unregistered offer and sale occurred in 2018, the involved parties, despite being aware, sold the CMCTs (Crowd Machine Compute Tokens) to ICO pools, which is a group of investors, and also to the individuals of the United States, without making sure that the involved investors were accredited or not. The Chief of Cyber Unit at SEC Enforcement Division, Kristina Littman, said that as alleged, the investors were misled by Crowd Machine and Sproule on how they were utilizing the ICO gains, resulting in investors wasting funds on a completely unrelated scheme.
Another Allegation
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The SEC has made another allegation which says that the Sproule and Crowd Machine diverted a heavy amount of funds, about $5.8 million, from the ICO proceedings towards entities of gold mining in South Africa and this was never revealed to involved investors. Littman further expressed that the SEC will constantly continue to charge every responsible issuer of digital asset securities that do not provide complete disclosure with truthfulness to the public.
SEC Growing Stricter
A few months earlier, the SEC expressed their hopes of getting more regulatory authority over the crypto industry and has been growing strict ever since. For instance, back in November 2021, the SEC charged the California-based promoter on a Bitcoin-related fraud. Also, the Enforcement results were published by the regulatory authority in 2021 which also involved details about taking actions for new upcoming possible threats in the crypto ecosystem.
At the time when the SEC released the Enforcement results, the SEC’s LA Office’s Regional Director, Michele Wein Layne, said that every individual who seeks to hide their identity behind the transaction of cryptocurrency just to swindle investors should acknowledge that the SEC will somehow track their all illegal activities and they will be held responsible for all actions very soon.
Crimes In Crypto Industry On Rise
Also, Chainalysis released a report recently which showed that the illegal activities in the cryptocurrency ecosystem have broken previous records in 2021, with illegitimate wallet addresses receiving about $14 billion, a rise of about 80% from 2020 which sits at $7.8 billion. Although, the research by Chainalysis said that the increasing number of illegal activities and transactions are majorly a result of mass adoption. In 2021, the volume of transactions surged by 567% reaching $15.8 trillion. Despite illicit addresses holding huge amounts, the addresses’ volume of transaction just makes a tiny 0.15% of the total volume.
It is worth noting that the majority of these illegal activities take place in the DeFi (Decentralized Finance) sector and are an alarming point of concern. The report also noted that the use of money laundering has massively increased, by 1,964%, specifically for the DeFi protocols.
Source: https://www.thecoinrepublic.com/2022/01/08/__trashed-5/