The US Securities and Exchange Commission (SEC) has taken action against two companies and four individuals for allegedly running a crypto pump-and-dump scheme.” The SEC stated that “while this case involves crypto assets, it bears the hallmarks of a classic pump-and-dump scheme.
SEC Prosecutes Two Firms in Crypto Pump-and-Dump Case
The U.S. Securities and Exchange Commission (SEC) announced Friday that it has filed chargesagainst two companies and four individuals for allegedly running a cryptocurrency pump-and-dump scheme.
The two companies are Bermuda-based Arbitrade Ltd. and Canadian-based Cryptobontix Inc. The other defendants are Troy R. J. Hogg, James L. Goldberg, and Stephen L. Braverman, its principals, and Max W. Barber, founder and sole owner of SION Trading SION is named as a relief defendant in this action.
The defendants allegedly engaged in a “pump-and-dump scheme involving crypto assets known as ‘Dignity’ or ‘DIG,'” the SEC detailed, adding.
Although the case involves crypto assets, it bears the hallmarks of a classic pump-and-dump scheme.
The Securities and Exchange Commission explained that between May 2018 and January 2019, two companies, through four defendants, “falsely announced that Arbitrade had acquired and was entitled to $10 billion in gold bullion.”
They further claimed that “the company intended to back each DIG token issued and sold to investors with $1 worth of this gold bullion and that an independent accounting firm had “audited” the gold bullion and confirmed its existence.”
and the SEC stated.
In fact, …… gold acquisition deal was merely a sham to increase demand for DIG.
This allowed defendants to sell at least $36.8 million in crypto tokens, including to U.S. investors, “at prices fraudulently inflated by public misrepresentations about the supposed gold acquisition,” the SEC detailed.
The Regulator added:
The SEC’s complaint charges defendants with violations of the antifraud and securities registration provisions of the federal securities laws.
The SEC “seeks permanent injunctive relief against all Defendants, disgorgement and pre-judgment interest, civil penalties, and officer and director bars against the individual Defendants.”
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