US regulator sues Chicago digital asset broker for alleged fraud and violation of security laws

The United States Securities and Exchange Commission (SEC) has filed suit against Chicago Crypto Capital LLC (CCC) and its senior members for suspected fraud and violation of existing security laws.

Company owner Brian Amoah and former salespeople Oliver Young and Elbert Elliot are accused of defrauding investors of $1.5 million. The SEC statement revealed that the trio were offering nearly 100 individual BXY tokens, many of which had no prior experience with digital assets.

The commission claimed that the defendants were “acting as unregistered brokers and conducting an unregistered offering of BXY tokens.” CCC failed to register with securities watchdog and failed to meet requirements for an exemption, a clear violation of Sections 5, 15 and 17 of the Securities Act of 1933 .

“Further, the SEC alleges that each of the Defendants made materially false and misleading statements in the offering, purchase, and/or sale of BXY tokens, including with respect to the safekeeping and delivery of BXY,” reads- on in the SEC report.

Due to the misrepresentation, dozens of investors never received their tokens, while those who received theirs had no choice but to pay a markup.

The SEC confirmed that it had accepted a settlement offer from Young in which he agreed to pay restitution and a civil penalty. The Commission said it would seek “an injunction, reimbursement with prejudgment interest and civil penalties” for the remaining parties.

BXY tokens went live in September 2019 and peaked at nearly $0.02, but three years later their value plunged to less than a thousandth of a dollar, leaving investors at a big loss.

Monitor the wild and wild west of digital assets

The Gary Gensler-led SEC has been on a roller coaster ride in its attempts to regulate the fledgling industry. The regulator has slammed the securities tag on several digital assets and has been embroiled in several legal requirements with token issuers.

Perhaps the SEC’s most famous case is its case with XRP issuers Ripple Labs, which has been ongoing since December 2020. supply of parts in 2017.

The SEC has amplified calls for issuers to register with the body and expanded its digital asset watchdog unit in a valiant attempt to control the industry.

Watch: BSV panel Global Blockchain Convention, Law & Order: Regulatory Compliance for Blockchain & Digital Assets

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