Other
Cyber Enforcement Actions
June 20, 2017
Digital Assets/Initial Coin Offerings
| Action Name | Description | Date Filed |
|---|---|---|
| The Securities and Exchange Commission charged New York City-based GTV Media Group Inc. and Saraca Media Group Inc., and Phoenix, Arizona-based Voice of Guo Media Inc., with conducting an illegal unregistered offering of GTV common stock. The SEC also announced charges against GTV and Saraca for conducting an illegal unregistered offering of a digital asset security referred to as either G-Coins or G-Dollars. The respondents have agreed to pay more than $539 million to settle the SEC's action. |
9/13/2021 |
|
| SEC v. Rivetz Corp., et al. | The Securities and Exchange Commission charged Rivetz Corp., Rivetz International SEZC, and Steven K. Sprague, the President of Rivetz and CEO of Rivetz International, with conducting an illegal, unregistered offering of securities through an initial coin offering. | 9/8/2021 |
| The Securities and Exchange Commission filed an action against BitConnect, an online crypto lending platform, its founder Satish Kumbhani, and its top U.S. promoter and his affiliated company, alleging that they defrauded retail investors out of $2 billion through a global fraudulent and unregistered offering of investments into a program involving digital assets. The Commission previously charged five other individuals in a related action for promoting the BitConnect offering. |
9/1/2021 5/28/2021 |
|
| Poloniex, LLC | The Securities and Exchange Commission filed settled charges against Poloniex, LLC, under which Poloniex agreed to pay more than $10 million for operating an unregistered online digital asset exchange in connection with its operation of a trading platform that facilitated buying and selling of digital asset securities. | 8/9/2021 |
| Blockchain Credit Partners d/b/a DeFi Money Market, et al. | The Securities and Exchange Commission charged two Florida men and their Cayman Islands company for unregistered sales of more than $30 million of securities using smart contracts and so-called “decentralized finance” (DeFi) technology, and for misleading investors concerning the operations and profitability of their business DeFi Money Market. | 8/6/2021 |
| SEC v. Uulala, Inc., et al. | The Securities and Exchange Commission filed settled charges against Uulala, Inc., and two of its California-based founders, Oscar Garcia and Matthew Loughran for allegedly defrauding more than a thousand investors in an unregistered offering of digital asset securities that raised more than $9 million and against Uulala and Garcia for allegedly engaging in a second fraudulent offering of convertible notes. | 8/4/2021 |
| Blotics Ltd., f/d/b/a Coinschedule Ltd. | The Securities and Exchange Commission filed settled charges against the operator of Coinschedule.com, a once-popular website that profiled offerings of digital asset securities. The SEC’s order finds that United Kingdom-based Blotics Ltd. violated the anti-touting provisions of the federal securities laws by failing to disclose the compensation it received from issuers of the digital asset securities it profiled. | 7/14/2021 |
| Loci, Inc., et al. | The Securities and Exchange Commission filed settled charges against Loci, Inc. and its CEO John Wise for making materially false and misleading statements in connection with an unregistered offer and sale of digital asset securities. According to the SEC's order, Loci provided an intellectual property search service for inventors and other users through its software platform called InnVenn. The SEC's order finds that from August 2017 through January 2018, Loci and Wise raised $7.6 million from investors by offering and selling digital tokens called "LOCIcoin." As stated in the order, in promoting the ICO, Loci and Wise made numerous materially false statements to investors and potential investors, including false statements concerning the company's revenues, number of employees, and InnVenn's user base. | 6/22/2021 |
| The Securities and Exchange Commission charged three individuals for their roles in the $30 million initial coin offering fraud that was spearheaded by convicted criminal Boaz Manor and his associate, Edith Pardo. The SEC previously charged Manor, Pardo, and their companies, CG Blockchain, Inc. and BCT Inc. SEZC in connection with the scheme in January 2020. |
6/15/2021 1/17/2020 |
|
| SEC v. Radjabli, et al. | The Securities and Exchange Commission filed charges against Edgar M. Radjabli of Boca Raton, Florida, and two entities he controlled for engaging in several securities frauds of escalating size. The SEC's complaint alleges that Radjabli, formerly a practicing dentist, and Apis Capital Management LLC, an unregistered investment adviser firm Radjabli owned and controlled, conducted a fraudulent offering of Apis Tokens, a digital asset representing tokenized interests in Apis Capital's main investment fund. The complaint further alleges that Radjabli and Apis Capital manipulated the securities market for Veritone Inc., a publicly-traded artificial intelligence company, by announcing in December 2018 an unsolicited cash tender offer to purchase Veritone for $200 million, when, in truth Radjabli and Apis Capital lacked the financing or any reasonable prospect of obtaining the financing necessary to complete the deal. | 6/11/2021 |
| SEC v. LBRY, Inc. | The Securities and Exchange Commission charged LBRY, Inc., a blockchain company, with conducting an unregistered offering of digital asset securities. According to the SEC's complaint, from at least July 2016 to February 2021, LBRY, which offers a video sharing application, sold digital asset securities called "LBRY Credits" to numerous investors, including investors based in the US. LBRY allegedly received more than $11 million in U.S. dollars, Bitcoin, and services from purchasers who participated in its offering. | 3/29/2021 |
| SEC v. Cutting | The Securities and Exchange Commission filed an emergency action and obtained a temporary restraining order and asset freeze against Shawn C. Cutting of Sandpoint, Idaho, for allegedly raising millions of dollars from hundreds of investors by falsely claiming to be a financial adviser with securities licenses, overstating investment returns, and misappropriating money received from investors. | 3/5/2021 |
| SEC v. Coinseed, Inc., et al. | The Securities and Exchange Commission charged Coinseed, Inc., a company that purported to offer a mobile investment application that enabled users to invest in digital assets, and its co-founder and Chief Executive Officer, Delgerdalai Davaasambuu, in connection with Coinseed's offer and sale of digital asset securities. | 2/17/2021 |
| SEC v. Krstic, et al. | The Securities and Exchange Commission charged three individuals with defrauding hundreds of retail investors out of more than $11 million through two fraudulent and unregistered digital asset securities offerings. | 2/1/2021 |
| Wireline, Inc. | The Securities and Exchange Commission filed a settled cease-and-desist proceeding against financial technology company Wireline, Inc. for making materially false and misleading statements in connection with an unregistered offer and sale of digital asset securities. | 1/15/2021 |
| Tierion, Inc. | The Securities and Exchange Commission filed a settled cease-and-desist proceeding against Texas-based blockchain startup company Tierion, Inc. for conducting an unregistered offering of securities in the form of a "token sale." Tierion has agreed to return funds to harmed investors, pay a $250,000 penalty, and disable trading in its "tokens." | 12/23/2020 |
| SEC v. Qin, et al. | The Securities and Exchange Commission filed an emergency action and obtained an order imposing an asset freeze and other emergency relief against Virgil Capital LLC and its affiliated companies in connection with an alleged securities fraud relating to Virgil Capital's flagship cryptocurrency trading fund, Virgil Sigma Fund LP. The Commission's action alleges that the fraud was directed by Stefan Qin, an Australian citizen and part-time resident of New York, who owns and controls Virgil Capital and its affiliated companies. | 12/22/2020 |
| SEC v. Ripple Labs, Inc., et al. | The Securities and Exchange Commission filed an action against Ripple Labs, Inc. and two of its executives, who are also significant security holders, alleging that they raised over $1.3 billion through an unregistered, ongoing digital asset securities offering. | 12/22/2020 |
| ShipChain, Inc. | The Securities and Exchange Commission filed a settled cease-and-desist proceeding against ShipChain, Inc. for conducting an unregistered initial coin offering of digital tokens, pursuant to which ShipChain agreed to pay a $2,050,000 penalty, transfer tokens in ShipChain's possession or control, publish notice of the order, and request removal of the tokens from digital asset trading platforms. | 12/21/2020 |
| SEC v. Elmaani | The Securities and Exchange Commission charged Amir Bruno Elmaani, who goes by the online alias Bruno Block, for conducting an illegal securities offering of digital tokens and for his scheme to profit by minting millions of unauthorized tokens for himself at no cost and selling them into the secondary market, thereby causing the value of others' tokens to plummet. | 12/9/2020 |
| SEC v. McAfee, et al. | The Securities and Exchange Commission charged businessman and computer programmer John McAfee for promoting investments in initial coin offerings to his Twitter followers without disclosing that he was paid to do so, and also charged McAfee's bodyguard Jimmy Watson, Jr. for his role in the alleged scheme. | 10/5/2020 |
| Salt Blockchain Inc. | The Securities and Exchange Commission filed a settled cease-and-desist proceeding against Salt Blockchain Inc. for conducting an unregistered initial coin offering of digital tokens, pursuant to which Salt agreed to settle the action by returning the proceeds from the offering to harmed investors, registering the tokens as securities, and paying a civil penalty. | 9/30/2020 |
| SoluTech, Inc., et al. | The Securities and Exchange Commission filed settled fraud charges against Connecticut-based SoluTech, Inc. and its former chief executive officer, Nathan Pitruzzello, in connection with a $2.4 million offering of digital asset securities that included an initial coin offering. | 9/25/2020 |
| Unikrn, Inc. | The Securities and Exchange Commission filed a settled cease-and-desist proceeding against Unikrn, Inc., an operator of an online eSports gaming and gambling platform headquartered in Seattle, Washington, for conducting an unregistered initial coin offering of digital asset securities, pursuant to which Unikrn agreed to pay a $6.1 million penalty, disable Unikrn's tokens, publish notice of the order, and request removal of the tokens from digital asset trading platforms. | 9/15/2020 |
| SEC v. FLiK, et al. | The Securities and Exchange Commission charged five Atlanta-based individuals, including film producer Ryan Felton, rapper and actor Clifford Harris, Jr., known as T.I. or Tip, and three others who each promoted one of Felton's two unregistered and fraudulent initial coin offerings (ICOs). The SEC also charged FLiK and CoinSpark, the two companies controlled by Felton that conducted the ICOs. | 9/10/2020 |
| SEC v. Millan, et al. | The Securities and Exchange Commission charged two high-level promoters for acting as unregistered brokers when selling the securities of AirBit Club, an investment scheme that targeted LatinX and Spanish-speaking communities and promised returns through a purported digital asset trading program and from the recruitment of others. | 8/18/2020 |
| Boon.Tech, et al. | The Securities and Exchange Commission filed settled cease-and-desist proceedings charging Virginia-based Boon.Tech and its chief executive officer Rajesh Pavithran for fraud and registration violations in connection with a $5 million initial coin offering (ICO) of digital asset securities. | 8/13/2020 |
| SEC v. NAC Foundation, LLC, et al. | The Commission filed a complaint charging NAC Foundation, its Chief Executive Officer Marcus Andrade, and political lobbyist Jack Abramoff with conducting a fraudulent, unregistered offering of AML BitCoin, a digital asset security the defendants claimed was a new and improved version of bitcoin. | 6/25/2020 |
| SEC v. High Street Capital Partners, LLC, et al. | The Commission filed an emergency action and obtained a temporary restraining order and asset freeze against two Pennsylvania-based brothers and three entities they control to stop a cryptocurrency offering fraud and the misappropriation of investor proceeds. | 6/16/2020 |
| BitClave PTE Ltd. | The Commission filed a settled cease-and-desist proceeding against BitClave PTE Ltd. for conducting an unregistered initial coin offering of digital asset securities, requiring company to return the proceeds from the $25.5 million offering and pay additional monetary relief to be distributed through a Fair Fund. | 5/28/2020 |
| SEC v. Putnam, et al. | The Commission filed a complaint and obtained an asset freeze and other emergency relief against Daniel F. Putnam, of Utah, Jean Paul Ramirez Rico, of Colombia, and Angel A. Rodriguez, of Utah, who allegedly defrauded investors of more than $12 million in two cryptocurrency-related schemes. | 5/7/2020 |
| SEC v. Dropil, Inc., et al. | The Commission filed a complaint against Dropil, Inc. and its three founders for allegedly conducting a fraudulent initial coin offering of unregistered digital asset securities raising money from thousands of investors. | 4/23/2020 |
| SEC v. Meta 1 Coin Trust, et al. | The Commission filed an emergency action against Meta 1 Coin Trust, a former state senator, and two others for allegedly conducting a fraudulent initial coin offering of unregistered digital asset securities. | 3/20/2020 |
| Steven Seagal | The Commission filed a settled cease-and-desist proceeding against an actor for failing to disclose payments he received for promoting an investment in an initial coin offering. | 2/27/2020 |
| Enigma MPC | The Commission filed a settled cease-and-desist proceeding against a blockchain technology company for conducting an unregistered initial coin offering of digital tokens. | 2/19/2020 |
| SEC v. Ackerman | The Commission filed a complaint against an Ohio-based businessman who allegedly orchestrated a digital asset scheme that defrauded approximately 150 investors, including many physicians. | 2/11/2020 |
| SEC v. Grybniak, et al. | The Commission filed a complaint against a purported blockchain-marketplace company and its founder for allegedly conducting a fraudulent initial coin offering of unregistered digital asset securities. | 1/21/2020 |
| Blockchain of Things, Inc. | The Commission filed a settled cease-and-desist proceeding against a blockchain technology company for conducting an unregistered initial coin offering of digital tokens. | 12/18/2019 |
| SEC v. Eyal, et al. | The Commission filed a complaint against a digital-asset entrepreneur and his company for allegedly defrauding investors in an initial coin offering that raised more than $42 million from hundreds of investors. | 12/11/2019 |
| SEC v. Telegram Group Inc., et al. | The Commission filed an emergency action and obtained a temporary restraining order against two offshore entities conducting an alleged unregistered, ongoing digital token offering in the U.S. and overseas that has raised more than $1.7 billion of investor funds. | 10/11/2019 |
| Block.one | The Commission filed a settled cease-and-desist proceeding against a blockchain technology company for conducting an unregistered initial coin offering of digital tokens that raised the equivalent of several billion dollars over approximately one year. | 9/30/2019 |
| SEC v. Lucas | The Commission filed a complaint against Jonathan C. Lucas, the former founder and chief executive officer of Fantasy Market, a purported online adult entertainment marketplace, for allegedly orchestrating a fraudulent initial coin offering. | 9/20/2019 |
| SEC v. ICOBox, et al. | The Commission filed a complaint against ICOBox and its founder Nikolay Evdokimov alleging that they conducted an illegal $14 million securities offering of ICOBox’s digital tokens and acted as unregistered brokers for other digital asset offerings. | 9/18/2019 |
| SEC v. Bitqyck, Inc., et al. | The Commission filed a settled district court action against an entity and two individuals that violated the registration and anti-fraud provisions of the Securities and Exchange Acts by offering and selling two unregistered digital asset securities, and the entity violated Section 5 of the Exchange Act by operating an unregistered national securities exchange, which the individuals aided and abetted. | 8/29/2019 |
| ICO Rating | The Commission filed a settled cease-and-desist proceeding against Russian entity ICO Rating for violating Section 17(b) of the Securities Act by failing to disclose payments received from issuers for publicizing their digital asset securities offerings. | 8/20/2019 |
| SimplyVital Health, Inc. | The Commission filed a settled cease-and-desist proceeding against a New England-based blockchain company for offering and selling approximately $6.3 million of securities to the public in unregistered transactions. | 8/12/2019 |
| SEC v. Middleton, et al. | The Commission obtained an emergency asset freeze against Veritaseum, Inc., Veritaseum, LLC and Reginald ("Reggie") Middleton, alleging that the defendants violated the antifraud provisions and engaged in an unregistered offering of digital securities. |
8/12/2019 |
| The Commission filed a district court action and obtained an emergency asset freeze against Longfin Corp., its CEO and three of its affiliates, alleging that the company and its CEO engaged in an unregistered distribution of securities and the three affiliates sold unregistered securities after the company announced a related-party acquisition of a purported cryptocurrency website, causing a dramatic increase its stock price. The Commission later filed an additional action against Longfin Corp. and its CEO asserting fraud claims for allegedly falsifying the company's revenue and, together with a former Longfin consultant, for fraudulently securing the company's listing on Nasdaq. |
6/5/2019 4/6/2018 |
|
| SEC v. Kik Interactive Inc. | The Commission filed a complaint against an ICO issuer for raising $100 million in an alleged unregistered securities offering that did not qualify for an exemption. | 6/4/2019 |
| SEC v. Pacheco | The Commission filed a litigated district court action against the operator of an alleged $26.5 million pyramid scheme that enticed investors with points that were convertible into a cryptocurrency. | 5/22/2019 |
| NextBlock Global Ltd. and Alex Tapscott | The Commission filed settled cease-and-desist proceedings against a Canadian corporation and its co-founder and former CEO for allegedly making misrepresentations in connection with a securities offering that raised $16 million to invest in blockchain companies and digital assets. | 5/14/2019 |
| SEC v. Natural Diamonds Investment Co., et al. | The Commission obtained an emergency court order halting an alleged ongoing $30 million Ponzi scheme targeting more than 300 investors in the U.S. and Canada. Argyle Coin, LLC, a purported cryptocurrency business, and its principal lured investors by falsely claiming an investment in Argyle Coin was risk-free because it was backed by fancy colored diamonds, and promising to use investor funds to develop the cryptocurrency business. | 5/13/2019 |
| Mutual Coin Fund LLC and Usman Majeed | The Commission filed settled cease-and-desist proceedings against a Michigan-based hedge fund manager and its principal for making misrepresentations and engaging in the unregistered, non-exempt sale of limited partnership interests in a fund it managed that invested in digital assets. | 4/1/2019 |
| Gladius Network LLC | The Commission filed a settled cease-and-desist proceeding against a Washington, D.C.-based company that raised $12.7 million in an unregistered, non-exempt ICO and then self-reported to the Commission. | 2/20/2019 |
| CoinAlpha Advisors LLC | The Commission filed settled cease-and-desist proceedings against a California-based hedge fund manager for engaging in the unregistered, non-exempt sale of limited partnership interests in a fund it managed that invested in digital assets. | 12/7/2018 |
| Floyd Mayweather, Jr. | The Commission filed settled cease-and-desist proceedings against a celebrity who promoted ICOs on social media without disclosing the fact and amount of compensation he received from the issuers for the promotions. | 11/29/2018 |
| Khaled Khaled ("DJ Khaled") | The Commission filed settled cease-and-desist proceedings against a celebrity who promoted an ICO on social media without disclosing the fact and amount of compensation he received from the issuer for the promotions. | 11/29/2018 |
| Paragon Coin, Inc. | The Commission filed a settled cease-and-desist proceeding against an online company, Paragon Coin, in connection with its unregistered offering of tokens in an ICO that raised approximately $12 million to implement blockchain technology in the cannabis industry. The Commission concluded that the PRG tokens were securities, and that the offering did not qualify from any exemption from registration. | 11/16/2018 |
| CarrierEQ, Inc., d/b/a Airfox | The Commission filed a settled cease-and-desist proceeding against a Boston-based start-up, Airfox, in connection with its unregistered offering of tokens in an ICO that raised approximately $15 million to develop a token-denominated “ecosystem.” The Commission concluded that the AIR tokens were securities, and that the offering did not qualify from any exemption from registration. | 11/16/2018 |
| Zachary Coburn | The Commission filed a settled cease-and-desist proceeding against the founder of a digital asset trading platform for secondary market trading of ERC20 tokens, EtherDelta, for causing the trading platform to operate as an unregistered national securities exchange. | 11/8/2018 |
| SEC v. Blockvest LLC, et al. | The Commission obtained an emergency court order halting a planned ICO and ongoing pre-ICO sales. The Commission alleged that Blockvest and its founder falsely claimed they received regulatory approval from various agencies (including the SEC) for the ICO, used the SEC seal without permission and a made-up regulatory agency to promote the ICO, and falsely claimed that Blockvest would be the first “licensed and regulated” cryptocurrency fund. | 10/11/2018 |
| SEC v. 1pool Ltd. a.k.a. 1Broker, et al. | The Commission charged 1Broker and its CEO with registration violations in connection with their overseas trading platform that exclusively used bitcoins and offered and sold to U.S. residents Contracts for Difference that track U.S.-listed securities and are security-based swaps. The Commission also alleged that 1Broker and its CEO failed to register the offer and sale of the products, failed to transact these products on a registered national exchange, performed no know-your-customer (KYC) inquiries, and acted as an unregistered dealer. | 9/27/2018 |
| TokenLot LLC, Lenny Kugel, and Eli Lewitt | The Commission filed settled administrative proceedings against a Michigan-based company and self-described “ICO Superstore” and its two owners for operating as unregistered broker-dealers in digital tokens sold in connection with ICOs and secondary market activities. | 9/11/2018 |
| Crypto Asset Management, LP and Timothy Enneking | The Commission filed settled administrative proceedings against a California-based hedge fund manager and its sole principal for offering a fund formed to invest in digital assets that operated as an unregistered investment company while falsely marketing it as the "first regulated crypto asset fund in the United States." | 9/11/2018 |
| Tomahawk Exploration LLC and David T. Laurance | The Commission obtained officer-and-director and penny stock bars in a settlement with the founder of a company responsible for a fraudulent ICO to fund oil exploration and drilling. | 8/14/2018 |
| SEC v. Jesky, et al. | The Commission filed a settled district court action against two individuals who illegally sold restricted shares in UBI Blockchain Internet Ltd. at high market prices instead of the fixed price under a registration statement. The Commission previously suspended trading in the stock. The two individuals agreed to return approximately $1.4 million in ill-gotten gains and more than $188,000 in penalties. | 7/2/2018 |
| SEC v. Titanium Blockchain Infrastructure Services Inc., et al. | The Commission obtained a court order halting an alleged ongoing fraud involving an ICO. The court also approved an emergency asset freeze and the appointment of a receiver. | 5/22/2018 |
| The Commission filed a district court action against two co-founders of Centra Tech, Inc., a purported financial services start-up, charging them with orchestrating an allegedly fraudulent ICO. The Commission later filed an amended complaint against a third member of Centra Tech, Inc., charging him with orchestrating the fraudulent ICO. |
4/20/2018 4/2/2018 |
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| SEC v. Montroll, et al. | The Commission filed a district court action against a former bitcoin-denominated platform and its operator for allegedly operating an unregistered securities exchange and defrauding users of that exchange. The SEC also charged the operator with making alleged false and misleading statements in connection with an unregistered offering of securities. | 2/21/2018 |
| The Commission filed a district court action and obtained an emergency asset freeze against an allegedly fraudulent ICO that claimed to run the world’s first “decentralized bank.” The Commission later settled with two former executives behind the allegedly fraudulent ICO in December 2018. |
1/25/2018 12/11/2018 |
|
| In re Munchee, Inc | The Commission filed a settled cease-and-desist order against a California-based company selling digital tokens in an unregistered offering to investors to raise capital for its blockchain-based food review service. | 12/11/2017 |
| SEC v. PlexCorps, et al. | The Commission filed a district court action and obtained an emergency asset freeze against a recidivist Quebec securities law violator, Dominic Lacroix, and his company, PlexCorps. | 12/1/2017 |
| SEC v. REcoin Group Foundation, LLC, et al. | The Commission charged Maksim Zaslavskiy and his two companies for allegedly defrauding investors in a pair of so-called initial coin offerings (ICOs) purportedly backed by investments in real estate and diamonds (Recoin Group Foundation and Diamond Reserve Club). | 9/29/2017 |
| Report of Investigation Pursuant to Section 21(a) of the Securities Exchange Act of 1934: The DAO | The Commission issued a Report of Investigation concerning the application of the U.S. federal securities laws to the offer and sale of DAO Tokens, which were virtual tokens created and distributed on a blockchain by an entity called “The DAO.” | 7/25/2017 |
| SEC v. Renwick Haddow, et al. | The Commission filed a district court action and obtained an emergency asset freeze against Renwick Haddow, the founder of a purported Bitcoin holding-and-trading platform and a chain of co-working spaces, alleging that he defrauded investors in both companies while also hiding his connection given his past disciplinary history with U.K. regulators. | 6/30/2017 |
| In re Bitcoin Investment Trust and SecondMarket, Inc. | The Commission filed a settled administrative proceeding against SecondMarket, Inc., a New York broker-dealer registered with the Commission, and Bitcoin Investment Trust (BIT), a Delaware trust whose sole assets are bitcoins. Each agreed to settle charges that they respectively violated Rules 101 and 102 of Regulation M under the Securities Exchange Act of 1934 in connection with their purchases of BIT shares during a continuous distribution. | 7/11/2016 |
| SEC v. Garza, et al. | The Commission charged Garza and his two bitcoin mining companies with conducting an alleged Ponzi scheme by offering shares – called “Hashlets” – in a bitcoin mining operation that did not have enough computing power for the mining they promised to conduct. | 12/1/2015 |
| In re Sand Hill Exchange, et al. | In June 2015, the SEC filed a settled administrative action against 2 entrepreneurs who offered and sold security-based swaps through a website called Sand Hill exchange and sought people to fund accounts at Sand Hill using dollars or bitcoins. | 6/17/2015 |
| In re BTC Trading, Corp. and Ethan Burnside | The Commission brought a settled administrative proceeding against Burnside, a video game programmer and bitcoin hobbyist, for (a) operating two online venues for trading securities – BTC Virtual Stock Exchange and LTC-Global Virtual Stock Exchange – using bitcoin and litecoin without registering the sites as broker-dealers or stock exchanges, and (b) conducting two unregistered offerings, one in LTC-Global itself, and another in a litecoin mining venture he owned and operated. | 12/8/2014 |
| In re Erik T. Voorhees | The Commission charged Voorhees, a Bitcoin entrepreneur with the offer and sale of unregistered securities in SatoshiDICE, a well-known bitcoin betting game, and FeedZeBirds, a social media marketing venture. | 6/3/2014 |
| SEC v. Shavers | The Commission charged Shavers and his company with defrauding investors in a bitcoin-denominated Ponzi scheme, raising more than 700,000 bitcoins in principal investments from BTCST investors, and falsely promising of up to 7% weekly returns based on BTCST’s purported bitcoin market arbitrage activity. | 7/23/2013 |
Account Intrusions
| Action Name | Description | Date Filed |
|---|---|---|
| SEC v. Willner | Day trader allegedly hacked into over 100 online customer brokerage accounts to manipulate the price of securities generating at least $700,000 in illicit profits | 10/30/2017 |
| SEC v. Mustapha | Overseas trader allegedly hacked into online customer brokerage accounts to manipulate stock prices through unauthorized trades | 6/22/2016 |
| SEC v. Murmylyuk | Trader allegedly hacked into online customer brokerage accounts to manipulate stock prices through unauthorized options trades | 4/17/2012 |
| SEC v. Nagaicevs | Overseas allegedly trader hacked into online customer brokerage accounts to manipulate stock prices through unauthorized trades | 1/26/2012 |
Hacking/Insider Trading
| Action Name | Description | Date Filed |
|---|---|---|
| SEC v. Watson, et al. | The Commission charged three individuals with insider trading in advance of an announcement by Long Blockchain Company (formerly known as Long Island Iced Tea Co.) that it was going to "pivot" from its existing beverage business to blockchain technology, which caused the company’s stock price to soar. | 7/9/2021 |
| SEC v. Ieremenko, et al. | The Commission filed a district court action alleging that Ieremenko, working with others, hacked into the SEC's EDGAR system and extracted test files containing nonpublic information about upcoming quarterly earnings announcement to use for illegal trading. | 1/15/2019 |
| SEC v. Hong, et al. | Overseas traders allegedly hacked into two U.S. law firms to obtain nonpublic information on which they traded | 12/27/2016 |
| SEC v. Ly | IT specialist allegedly hacked into the email accounts of senior executives of his employer to obtain nonpublic information on which he traded | 12/5/2016 |
| SEC v. Zavodchiko, et al. | Overseas trading ring allegedly hacked into the servers of newswire services to obtain nonpublic information on which they traded | 2/18/2016 |
| SEC v. Dubovoy, et al. | Overseas trading ring allegedly hacked into the servers of newswire services to obtain nonpublic information on which they traded | 8/11/2015 |
Market Manipulation/False Tweets/Fake Websites/Dark Web
| Action Name | Description | Date Filed |
|---|---|---|
| SEC v. Melnick | The Commission charged Mark Melnick, the host of a stock trading webcast, for spreading more than 100 false rumors about public companies in order to generate illicit profits. | 9/30/2021 |
| SEC v. Trovias | The Commission charged Apostolos Trovias, a Greek national, with perpetrating a fraudulent scheme to sell what he called "insider trading tips" on the Dark Web. The Dark Web, which facilitates anonymity by obscuring users’ identities, allows users to purchase and sell illegal products and services, and in this case, insider trading tips. | 7/9/2021 |
| SEC v. Jones | The Commission filed charges against James Roland Jones of Redondo Beach, California, for perpetrating a fraudulent scheme to sell what he called “insider tips” on the dark web. The dark web allows users to access the internet anonymously and, as such, has often been used to host websites and marketplaces that support or promote illegal activity. This is the SEC’s first enforcement action involving alleged securities violations on the dark web. | 3/18/2021 |
| SEC v. Fassari | The Commission filed fraud charges and obtained an asset freeze and other emergency relief against an Irvine, California-based trader who used social media to spread false information about a defunct company, while secretly profiting by selling his own holdings of the company's stock. | 3/2/2021 |
| SEC v. Ross | The Commission filed charges against Barton S. Ross for his role in a market manipulation scheme in which he and several other individuals created false rumors about public companies in order to profitably trade around the temporary price increases caused by the publication of the rumors. | 12/18/2020 |
| SEC v. Sotnikov, et al. | The Commission filed charges against a Russian national and entities he controlled for allegedly participating in a fraudulent scheme to lure U.S. investors into buying fictitious Certificates of Deposit (CDs) promoted through internet advertising and “spoofed” websites that mimic the actual sites of legitimate financial institutions. | 3/13/2020 |
| SEC v. Burns | U.S.-based trader allegedly filed false tender offer form on EDGAR to manipulate stock price | 7/11/2018 |
| SEC v. Murray | U.S.-based trader allegedly filed false tender offer form on EDGAR to manipulate stock price | 5/19/2017 |
| SEC v. Aly | Overseas trader allegedly manipulated stock price by filing false Schedule 13D form on EDGAR | 5/24/2016 |
| SEC v. Craig | Overseas trader allegedly disseminated false tweets to manipulate stock prices | 11/6/2015 |
| SEC v. PTG Capital Partners LTD, et al. | Overseas trader allegedly manipulated prices of stocks through false EDGAR filings | 6/4/2015 |
Regulated Entities – Cybersecurity Controls and Safeguarding Customer Information
| Action Name | Description | Date Filed |
|---|---|---|
| KMS Financial Services, Inc.; Cetera Advisor Networks LLC, et al.; Cambridge Investment Research, Inc., et al. | The Commission sanctioned eight firms in three actions for failures in their cybersecurity policies and procedures that resulted in email account takeovers exposing the personal information of thousands of customers and clients at each firm. The eight firms, which have agreed to settle the charges, are: Cetera Advisor Networks LLC, Cetera Investment Services LLC, Cetera Financial Specialists LLC, Cetera Advisors LLC, and Cetera Investment Advisers LLC (collectively, the Cetera Entities); Cambridge Investment Research Inc. and Cambridge Investment Research Advisors Inc. (collectively, Cambridge); and KMS Financial Services Inc. (KMS). All were Commission-registered as broker dealers, investment advisory firms, or both. | 8/30/2021 |
| GWFS Equities, Inc. | The Commission filed settled charges against GWFS Equities Inc. (GWFS), a Colorado-based registered broker-dealer and affiliate of Great-West Life & Annuity Insurance Company, for violating the federal securities laws governing the filing of Suspicious Activity Reports (SARs). GWFS provides services to employer-sponsored retirement plans.
According to the SEC’s order, from September 2015 through October 2018, GWFS was aware of increasing attempts by external bad actors to gain access to the retirement accounts of individual plan participants. The order further finds that GWFS was aware that the bad actors attempted or gained access by, among other things, using improperly obtained personal identifying information of the plan participants, and that the bad actors frequently were in possession of electronic login information such as user names, email addresses, and passwords. |
5/12/2021 |
| Virtu Americas LLC (f/k/a KCG Americas LLC) | The Commission filed a settled cease-and-desist proceeding against Virtu Americas LLC (f/k/a KCG Americas LLC) for failing to comply with certain provisions of Regulation SCI in connection with the dark pool formerly known as KCG MatchIt. | 9/30/2019 |
| The Options Clearing Corporation | The Commission filed a settled cease-and-desist and administrative proceeding against a registered clearing agency for violating Exchange Act Rules 17Ad-22(b)(2) and (e)(1), (3), (4), (6) and (7), Reg. SCI, and Section 19(b)(1) of the Exchange Act and Rule 19b-4(c) thereunder as a result of its failures to establish and enforce policies and procedures involving financial risk management, operational requirements and information-systems security and changing of policies on core risk management issues without obtaining the required SEC approval. | 9/4/2019 |
| Voya Financial Advisors | The Commission filed settled administrative proceedings against an Iowa-based broker-dealer and investment adviser related to its failures in cybersecurity policies and procedures surrounding a cyber intrusion that compromised personal information of thousands of its customers, in violation of Reg S-P and Reg S-ID. | 9/26/2018 |
| Morgan Stanley Smith Barney LLC | Failure to safeguard customer data from cyber-breaches in violation of Reg S-P stemming from a Morgan Stanley employee transferring confidential customer data to a personal server that was eventually hacked. | 6/8/2016 |
| RT Jones Capital Equities Management, Inc. | Failure to safeguard customer data from cyber-breaches in violation of Reg S-P as a result of an investment adviser's storage of sensitive customer information on a third-party hosted web server that was eventually hacked and its failure to adopt written policies and procedures reasonably designed to safeguard such customer information. | 9/22/2015 |
Public Company Disclosure and Controls
| Action Name | Description | Date Filed |
|---|---|---|
| Pearson plc | The Commission filed settled charges against Pearson plc, a London-based public company that provides educational publishing and other services to schools and universities. Pearson agreed to pay $1 million to settle charges that it misled investors about a 2018 cyber intrusion involving the theft of millions of student records, including dates of births and email addresses, and had inadequate disclosure controls and procedures. | 8/16/2021 |
| First American Financial Corporation | The Commission filed settled charges against real estate settlement services company First American Financial Corporation for disclosure controls and procedures violations related to a cybersecurity vulnerability that exposed sensitive customer information. | 6/14/2021 |
| Report of Investigation Pursuant to Section 21(a) of the Securities Exchange Act of 1934: Certain Cyber-Related Frauds Perpetrated Against Public Companies and Related Internal Accounting Controls Requirements | The Commission issued a Report of Investigation regarding certain cyber-related frauds and public company issuer internal accounting controls requirements. The Report discusses a type of cyber-fraud -- called "business email compromise" -- where perpetrators pretended in emails to be high-level company executives or vendors, and then convinced company personnel to transmit large wire transfers to accounts controlled by the perpetrators. The Report explains that public companies should consider cyber threats when implementing internal accounting controls. | 10/16/2018 |
| Altaba Inc., f/d/b/a Yahoo! Inc. | Failure to disclose December 2014 data breach in which Russian hackers stole personal data related to more than 500 million Yahoo! user accounts; the data breach was not disclosed until September 2016. | 4/24/2018 |
Trading Suspensions
| Action Name | Description | Date Filed |
|---|---|---|
| Long Blockchain Corp. | The Commission revoked registration of the securities of Long Blockchain Corp., a beverage business that had announced a shift to become a blockchain technology business which never became operational, for failure to file quarterly and annual reports. | 2/22/2021 |
| Bitcoin Generation, Inc. | The Commission suspended trading in the securities of BTGN, inter alia, because of concerns about the accuracy and adequacy of information contained in BTGN’s public statements and because of stock promotional activity relating to BTGN and the market impact of such promotional activity. | 4/29/2019 |
| American Retail Group, Inc. aka Simex, Inc. | The Commission suspended trading in the securities of ARGB amid questions surrounding statements claiming that the company had partnered with an SEC-qualified custodian for use with cryptocurrency transactions and that the company was conducting a token offering that was “officially registered in accordance [with] SEC requirements.” | 10/22/2018 |
| Bitcoin Tracker One and Ether Tracker One | The Commission suspended trading in the securities of CXBTF and CETHF because of confusion among market participants regarding the true nature of these instruments. | 9/9/2018 |
| Evolution Blockchain Group Inc. | The Commission suspended trading in Evolution Blockchain Group Inc. because of questions about the accuracy of information contained in a press release and concerns about recent unusual and unexplained market activity in the company’s common stock. | 6/25/2018 |
| IBITX Software Inc. | The Commission suspended trading in IBITX because of questions about the accuracy of assertions concerning the company’s development of alternative forms of currency and its operation of a cryptocurrency platform. | 4/20/2018 |
| HD View 360 Inc. | The Commission suspended trading in this publicly-traded company because of concerns regarding the accuracy and adequacy of information about the company, including certain statements regarding enhancing a subsidiary with blockchain technology. | 3/1/2018 |
| Cherubim Interests, Inc. | The Commission suspended trading in this publicly-traded company because of concerns regarding the accuracy and adequacy of information in the marketplace including in press releases issued. | 2/16/2018 |
| PDX Partners, Inc., | The Commission suspended trading in this publicly-traded company because of concerns regarding the accuracy and adequacy of information in the marketplace about, among other things, the nature of the company’s business operations and the value of its assets. | 2/16/2018 |
| Victura Construction Group, Inc., | The Commission suspended trading in this publicly-traded company because of concerns regarding the accuracy and adequacy of information in the marketplace about, among other things, the nature of the company’s business operations and the value of its assets, including in press releases issued. | 2/16/2018 |
| UBI Blockchain Internet, Ltd. | The Commission suspended trading in this publicly-traded company because of (i) questions regarding the accuracy of assertions, since at least September 2017, by UBIA in filings with the Commission regarding the company’s business operations; and (ii) concerns about recent, unusual and unexplained market activity in the company’s Class A common stock since at least November 2017. | 1/5/2018 |
| The Crypto Co. | The Commission suspended trading in this publicly-traded company because of concerns regarding the accuracy and adequacy of information in the marketplace about, among other things, the compensation paid for promotion of the company, and statements in Commission filings about the plans of the company’s insiders to sell their shares of The Crypto Company’s common stock. | 12/18/2017 |
| In re Rocky Mountain Ayres, Inc. | The Commission suspended trading in this publicly-traded company because of questions regarding by RMTN in a press release dated August 22, 2017, and in the “Project White Paper” documents, accessible through a link in the press release, concerning, among other things, the Kairos ETF. | 9/15/2017 |
| In re American Security Resources Corp. | The Commission suspended trading in this publicly-traded company because of questions regarding information concerning the company’s transition to the cryptocurrency markets and early adoption of blockchain technology. | 8/24/2017 |
| In re First Bitcoin Capital Corp. | The Commission suspended trading in this publicly-traded company because of concerns regarding the accuracy and adequacy of information about the company’s value of the company’s assets and capital structure. | 8/23/2017 |
| In re CIAO Group, Inc. | The Commission suspended trading in this publicly-traded company because of questions regarding the accuracy of assertions concerning business plans in the telecommunications industry and plans for an ICO. | 8/9/2017 |
| In re Strategic Global Investments, Inc. | The Commission suspended trading in the securities of this publicly-traded company because of questions regarding the accuracy of assertions by the company concerning ICOs. | 8/3/2017 |
| In re Sunshine Capital, Inc. | The Commission suspended trading in the securities of this publicly-traded company because of questions regarding the accuracy of assertions by the company concerning the liquidity and value of the company’s assets, namely DIBCOINS, a cryptocurrency the company’s majority shareholder had created. | 4/11/2017 |
| In re Imogo Mobile Technologies Corp. | The Commission suspended trading in the securities of this publicly-traded company amidst questions about its business which touted, among other things, the development and testing of a purportedly secure mobile Bitcoin platform. | 2/19/2014 |
Modified: Oct. 4, 2021