The US Securities and Exchange Commission (SEC) has taken action against two companies and four individuals who allegedly committed a cryptocurrency dumping scheme. “While this case concerns crypto assets, it bears the hallmarks of a classic pump-and-dump system,” the SEC said.
SEC charges two companies for crypto pump and dump
The US Securities and Exchange Commission (SEC) said Friday that it has done so Foot Charges against two companies and four individuals who allegedly perpetrated a cryptocurrency dumping scheme.
The two companies are Arbitrade Ltd. headquartered in Bermuda and Cryptobontix Inc. Canadian and other defendants are its directors – Troy RJ Hogg, James L. Goldberg and Stephen L. Braverman – and Max W. Barber, founder and sole owner of SION Trading. SION is called the relief defendant in the case.
The defendants allegedly committed a “pumping and dumping scheme involving a crypto asset called ‘Dignity’ or ‘DJ’,” the SEC explained, adding:
Although this case includes crypto-origins, it bears the hallmarks of a classic pump and dump system.
The SEC explained that between May 2018 and January 2019, the two companies, through the four defendants, issued advertisements falsely claiming that Arbitrade had acquired and obtained $10 billion in gold bullion.
They also claimed that “the company intends to subsidize every DIG token issued and sold to investors for $1.00 of this gold, and that independent accounting firms have conducted an ‘audit’ on the gold and verified its existence.”
The Supreme Education Council said:
In fact…the gold takeover deal was just a ploy to increase the demand for DIG.
This allowed the defendants to sell at least $36.8 million in cryptocurrency, including to US investors, “at prices fraudulently inflated by public misrepresentations about the supposed acquisition of gold,” the Securities and Exchange Commission explained.
Organizer added:
The SEC complaint accuses the defendants of violating the anti-fraud and securities registration provisions of the federal securities laws.
The Securities and Exchange Commission (SEC) is seeking “permanent injunctive relief, removal of advance judgment, civil penalties against all defendants, and warrants of officers and directors against individual defendants.”
What do you think about the Securities and Exchange Commission taking action against the cryptocurrency dump scheme? Let us know in the comments section below.
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