Altcoin News: SEC Settles Litigation with Token Fraud Organizers

August 30, 2019, by Marko Vidrih on ALTCOIN MAGAZINE

The U.S. Securities and Exchange Commission (SEC) has settled the trial with the Bitqyck crypto exchange and its founders, accused of carrying out two fraudulent token sales.

According to a post on the agency’s website, Bitqyck founders Bruce Bise and Sam Mendez raised $13 million by selling Bitqy and BitqyM tokens to more than 13,000 investors through an “unregistered offer of securities”.

The SEC claims that defendants misled investors on a number of issues and also managed the unregistered TradeBQ securities exchange, which traded Bitqy token.

“ Investors allegedly received $4.5 million for referring new investors to Bitqyck but collectively lost more than two-thirds of their investment in the Dallas-based company,” writes SEC.

In addition, according to the agency, Bitqyck promised investors a share in their business, which made its tokens especially attractive for some of them.

“Because digital investment assets represent a new and exciting technology, they can be very alluring, especially if investors believe they are getting in on the ground floor and will own part of the operations,” said David Peavler, Director of the SEC’s Fort Worth Regional Office. “We allege that the defendants took advantage of investors’ appetite for these investments and fraudulently raised millions of dollars by lying about their business.”

Bitqyck will transfer funds received from illegal transactions, interest for the period until the decision and a fine of $8,375,617. $890,254 and $850,022 respectively, will be recovered from Bise and Mendez.

Author: Marko Vidrih