Securities and Exchange Commission

(S.D.N.Y Filed April 20, 2021)

Litigation Release No. 25076 / April 20, 2021

Securities and Exchange Commission v. Sheng-Wen Cheng, Civil Action No. 1:21-cv-3456

The Securities and Exchange Commission charged New York resident Sheng-Wen Cheng with defrauding investors in the offering of equity and digital asset securities.

According to the SEC's complaint, from approximately August 2017 to June 2018, Cheng obtained investments totaling over $400,000 from several investors for a purported blockchain-based Peer-to-Peer lending marketplace startup that would be developed by several companies under his control, Alchemy Finance, Inc., Alchemy Company, Ltd., and Alchemy Coin Ltd. (collectively, "Alchemy"). As alleged, Cheng falsely stated in offering materials that he had received a $30 million investment from a single investor. Cheng also allegedly guaranteed short-term profits on the investment in Alchemy, despite the fact that Alchemy had no actual operations or revenues at the time. The complaint further alleges that shortly after obtaining investors' money, Cheng transferred the majority of proceeds to his personal bank account, misappropriating approximately $300,000 of the funds for his personal use.

The SEC's complaint, filed in the U.S. District Court for the Southern District of New York, charges Cheng with violations of the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Cheng has consented to the entry of a judgment that enjoins him from violating the charged provisions and from participating, directly or indirectly, in any offering of a digital asset security, with monetary relief to be determined at a later date. The settlement is subject to court approval.

In a parallel action concerning the same conduct, the U.S. Attorney's Office for the Southern District of New York announced criminal charges against Cheng.

The SEC's investigation was conducted by Brian A. Kudon and Sandeep Satwalekar. The case is being supervised by Lara Shalov Mehraban. The SEC's litigation is being handled by Chris Dunnigan and Mr. Kudon. The SEC appreciates the assistance of the U.S. Attorney's Office for the Southern District of New York and the Federal Bureau of Investigation.