US SEC Dismantles Crypto Securities Fraudulent Offering

The US Securities and Exchange Commission (SEC Securities and Exchange Commission (SEC) The Securities and Exchange Commission (SEC) is one of the most widely known independent authorities in the United States. The SEC has a wide range of responsibilities, helping police markets and curbing against abuse. This includes enforcing federal securities laws, proposing securities rules, and regulating the US’ stock and options exchanges.As one of the paramount regulatory authorities in the US, the SEC is responsible for the oversight of public companies in the aforementioned segments.Wha The Securities and Exchange Commission (SEC) is one of the most widely known independent authorities in the United States. The SEC has a wide range of responsibilities, helping police markets and curbing against abuse. This includes enforcing federal securities laws, proposing securities rules, and regulating the US’ stock and options exchanges.As one of the paramount regulatory authorities in the US, the SEC is responsible for the oversight of public companies in the aforementioned segments.Wha Read this Term) announced on Friday that it had charged four individuals for their roles in fraud in digital asset securities offerings.

According to the press release, Steven Chiang (known as Cyrus Kong), Eric Tippetts, James Hardy and Maurice 'Butch' Chelliah are accused by the watchdog for their roles in raising over $10 million through two fraudulent and unregistered digital asset securities offerings. In December 2017, Chiang founded NASGO, a company that claimed to have developed a blockchain-based platform that allows clients to invest in digital asset securities called NSG tokens.

Then, Chiang and Tippetts allegedly offered NSG tokens to the public in an unregistered offering, in which they allegedly lied about the amount of NSG tokens sold, the total number of users subscribed to NASGO's platform and the projected value of NSG tokens. In videos posted to popular social media sites, Tippetts is alleged to have repeated these claims.

Moreover, the SEC alleges that Tippetts and Hardy created Sharenode, a company to 'market' the NASGO platform as investor interest in NSG tokens declined. Tippetts and Hardy used Sharenode to launch another unregistered offering of Sharenode securities called SNP tokens, according to the SEC's complaint. Tippetts and Hardy falsely claimed that the SNP token was on the NASGO 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 and would increase in value each week by $.10 and increase by $.10 for every new company joining the NASGO platform.

Amount of Funds Allegedly Misappropriated

The SEC's complaint alleges that the defendants misappropriated nearly $4 million from investors. Additionally, the SEC alleges that Chiang and Tippetts misused other Sharenode investor funds by spending at least 133 bitcoin for listing NSG tokens on an unregistered trading platform and funding a team of captive traders to trade NSG tokens among themselves to create the false appearance of a robust market with increasing prices. As a result, traders were led to believe that over $2.5 million worth of NSGs were traded daily on BitForex during the first 60 days and that the price of NSGs was steadily increasing due to investor demand.