The US Securities and Exchange Commission (SEC) entered into negotiations with the cryptocurrency firm Veritaseum, the founder of which was suspected of market manipulation and the illegal sale of tokens.
Complaints against Veritaseum CEO Reginald Middleton and two of his companies in August 2019, the SEC said this week it was in talks with defendants to resolve an unregistered ICO, reports
As previously reported, Middleton and his firms, Veritaseum LLC and Veritaseum, allegedly raised $ 14.8 million through an unregistered offering of securities – Veritaseum tokens (VERI). According to the report, the defendants conducted an initial placement of Veritaseum tokens from April 25, 2017 to May 27, 2017, and also offered token sales after the ICO.
The SEC complaint includes numerous allegations, including misleading investors about the company’s previous business activities, as well as disseminating allegations of high demand for VERI and promises of a potential income of millions of dollars.
However, according to the SEC, the product did not possess such qualities and the defendants were involved in manipulating VERI tokens in order to increase their price and convince investors to buy more tokens.
Moreover, Middleton tried to rebrand VERI to avoid being subject to federal securities laws and registration requirements, trying to give them the status of “prepaid fees”, “software” or even gift card derivatives.
The SEC has repeatedly entered into negotiations with cryptocurrency companies that have violated securities laws and other regulations. In late August, Bitqyck settled
the case of the unregistered sale of tokens with the SEC and agreed to pay a civil fine of $ 8.5 million, as well as interest. In mid-August, SimplyVital Health settled
SEC case on unregistered sale of tokens for $ 6.3 million