SEC Sues a Crypto Firm From Chicago Over a $1.5M ICO
The Securities Exchange Commission announced on Wednesday, September 14th, that it filed a complaint against a crypto broker from Chicago. Chicago Crypto Capital LLC (“CCC), its owners, and several other individuals were charged with violating the Securities Act of 1933 (the “Securities Act”) with an ICO conducted between 2018 and 2019.
The SEC Sues Chicago Crypto Capital
Ever since its 2017 DAO report, the SEC has been pursuing legal action against various crypto firms over their initial coin offerings (ICO), which the commission considers to be securities. Chicago Crypto Capital found itself in SEC’s crosshairs on Wednesday due to an ICO campaign they conducted between 2018 and 2019.
According to the SEC’s complaint, from approximately August 2018 through November 2019, CCC, Amoah, Young, and Elliott acted as unregistered broker-dealers and conducted an unregistered offering of BXY tokens, illegally raising at least $1.5 million in proceeds from approximately 100 individuals, many of whom had no experience investing in crypto assets. The BXY offering was not registered with the Commission and did not satisfy any exemption from registration, and none of the defendants were registered with the Commission as brokers.
Along with the company, the commission sued its founder Brian Amoah, as well as two former employees Darcas Oliver Young and Elbert “Al” Elliott. According to the announcement, Young settled with the SEC and agreed to pay several fines and penalties.
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The Hunt for Unregistered ICOs
The Chicago Crypto Capital is far from the only digital assets firm under pressure from the SEC over its offerings. Earlier this year, the commission made moves to investigate Binance over its ICO. Perhaps the most famous case of a dispute over whether certain digital assets are securities happened between the SEC and Coinbase.
The company has been accused of listing unregistered securities, as well as of instances of insider trading. The onslaught is unlike to end seeing how Gensler not only believes that crypto and DeFi, in general, need more regulation but also hinted that even assets like Ethereum could be considered securities.
The current Chairman’s interpretation of whether various digital assets are or are not securities remains rather controversial. Coinbase, for example, not only remained adamant that it doesn’t list securities but also began organizing politically.
This Wednesday they announced that they are launching scorecards for various representatives. This initiative hopes to bring pro-crypto lawmakers into office and hopefully make clear rules on the legal status of digital assets.
Do you think the SEC should reconsider its designation of ICOs as securities? Let us know in the comments below.