New York-based cryptocurrency firm Veritaseum is facing emergency action from the Securities and Exchange Commission (SEC) regarding its allegedly “fraudulent” token offering in 2017.

The price of Veritaseum’s Veri token has taken a huge hit, falling by more than 76% to its lowest ever price of just $4.07.

Veritaseum CEO Reggie Middleton is at the centre of the court filing, which states: “This is emergency action to stop the Defendants’ further dissipation of the approximately $8 million of investor proceeds that remain from approximately $14.8 million they fraudulently raised in 2017 and early 2018 in an offering of digital securities.”

It continues: “The defendant [Middleton], a Brooklyn-based self-described financial guru, raised the $14.8 million by making material misrepresentations and omissions about the unregistered securities they offered.”

The court filing by the SEC also makes accusations claiming that Middleton knowingly misled investors about his prior business ventures, as well as touting “outsized” and “fictitious” investor demand for the Veri token.

He allegedly claimed that the product was ready to generate millions of dollars worth of revenue when “no such product existed”.

According to Middleton, the Veri token was a utility token that had the sole intention of being used to buy software and research, although the SEC believes it was marketed as a security.

Last October, Coin Rivet reported on Veritaseum’s acquisition of Wall Street veteran Jeffrey Tabak, which coincided with the company’s plans to expand across Africa.

However, the SEC filing gets even more damning for Middleton, who is accused of placing “secretive” and “manipulative” trades into the digital asset platform, inflating the price by 315% in one day before boasting about the gains on social media.

Reggie Middleton responded to the allegations on Telegram by stating: “This is a meritless action by the SEC. Mr. Middleton and Veritaseum have acted appropriately and been truthful about the company’s innovative software platform, and we look forward to proving that in court.”