SEC Halts Tomahawkcoins ICO on Fraud Allegations

The US Securities and Exchange Commission has halted another fraudulent Initial Coin Offering (ICO) Initial Coin Offering (ICO) An Initial Coin Offering (ICO) is a kind of crypto token sale that is used as a method of fundraising, similar to an Initial Public Offering (IPO), in which stocks are sold to raise money for a company.In order to launch an ICO, a company simply needs to create a website, issue a token, and set a time and date for the sale. Investors buy ICO tokens in exchange for another cryptocurrency, like Bitcoin or Ethereum; after a set amount of time, they receive the tokens they purchased in the sale.Acco An Initial Coin Offering (ICO) is a kind of crypto token sale that is used as a method of fundraising, similar to an Initial Public Offering (IPO), in which stocks are sold to raise money for a company.In order to launch an ICO, a company simply needs to create a website, issue a token, and set a time and date for the sale. Investors buy ICO tokens in exchange for another cryptocurrency, like Bitcoin or Ethereum; after a set amount of time, they receive the tokens they purchased in the sale.Acco Read this Term), arguing that operators of ‘Tomahawkcoins’ not only violated securities regulations but also made false statements to investors.

According to the agency, David T. Laurance and Tomahawk Exploration LLC received a lifetime officer-director bar, lifetime penny stock bar and an injunction prohibiting them from violating the federal securities laws.

The top US watchdog alleges that the Tomahawk ICO and its principals sought to raise funds from investors by misrepresenting the company as possessing “leases for oil drilling sites” and using “inflated projections of oil production that were contradicted by the company’s own internal analysis.”

At the core of the alleged fraud, according to the SEC, the company’s marketing activities unlawfully and publicly touted ‎several claims to lure investors to their ‎tokens, which gave them a belief that their investment ‎in tokens could generate a return on their investment.

Specifically, Tomahawk lied about its tokens potential claiming that owners would be able to cash in on their investment through “the anticipated oil production and secondary trading of the tokens.”

The purported frauds by Laurance and his companies also included fake testimonials that he has a “flawless background” while he was previously convicted for his role in a fraudulent securities case.

Without admitting or denying the allegations, the defendants consented to a cease and desist order and agreed to pay a $30,000 fine.

Actions to rein in the red-hot sector

The SEC has repeatedly warned investors against throwing money into the crowdsale because the company intended to launch a cryptocurrency-based ‎investment scheme without even attempting to follow US securities laws.‎ The watchdog is worried that in many cases, retail investors aren’t adequately told about the risks involved in the cryptocurrency investment products.

The US regulators have taken enforcement actions, too, with a dozen companies having put their offerings on hold after the SEC issued warnings. Further, the agency froze assets of several cryptocurrency firms, halted ICOs and suspended trading in companies that claimed cryptocurrency or Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Read this Term dealings.

Most recently, the SEC has rejected another attempt by Cameron and Tyler Winklevoss, founders of the Gemini cryptocurrency exchange, to list shares of what would have been the world’s first Bitcoin exchange-traded fund (ETF).

Earlier in May, the SEC’s Office of Investor Education and Advocacy (OIEA) created a ‎bogus ‎initial coin offering (ICO) website that shows how ‘too good to be’ ‎true ‎investment opportunity in cryptocurrency would look like.

Putting cryptocurrency companies and their advisers on notice, however, failed to chill the booming market. The recent clampdown comes just as titans of U.S. cryptocurrency operators are in a race to build the nation’s first regulated venues for tokens deemed to be securities.