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SEC Going Hard After ICO Fraudsters

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Hacker with Bitcoin wearing anonymous mask. Source: shutterstock.com

The US Securities and Exchange Commission (SEC) obtained a permanent penny stock bar and an officer-and-director bar against the founder of a fraudulent initial coin offering (ICO), which actually entered the cryptocurrency market as a cover for funding an oil exploration company in California.

SEC Orders Monetary Penalties and Bars for the Violator

The Commission published an official press release on August 14, in Washington D.C., to announce the most recent obtaining of a permanent officer and director bar, as well as a penny stock bar.

In the spirit of transparency regarding the ICO fraudsters, the SEC shared details about the perpetrator, David T. Laurence, and the confirmed activities that he was involved in.

The accused and his company, Tomahawk Exploration LLC, attempted to issue an initial coin offering of a digital coin that they call “Tomahawkcoins.” The Commission described the issuance of Tomahawkcoins as a fraudulent activity used for funding oil exploration in California.

Even though the initial coin offering of Tomahawkcoin failed, Tomohawk used online promotions in order to issue the tokens, falsely promising that investors would be able to exchange their tokens for fiat or profit from oil production. The perpetrators also used inflated projections of the company’s records to deceive the public.

According to the SEC, Laurence failed to mention his criminal past in his promotional materials. Previously, Laurence was accused of fraudulent activities regarding securities offerings, for which he was also convicted.

As per the press release, Laurence consented to the officer and director bar and the penny stock bar, along with a fine of $30,000. In addition, a cease and desist order was issued upon Tomahawk and Laurence.

SEC Continues the War Against Fraudulent ICOs

Further, in the immediate press release on the matter of David T. Laurence’s conviction and the illegal activities behind Tomahawk Exploration LLC, SEC reminded the public of the dangers of investing in suspicious ICOs.

In order to protect crypto investors from falling into scam coins and fake ICOs, the SEC issued Investor Bulletin in order to educate the public on the most relevant signs that can reveal a fraudulent ICO.

In addition, investors can use Investor.gov in order to check the background of anyone offering an investing opportunity.

Reminding investors to be careful, Robert A. Cohen, Chief of the SEC’s Cyber Unit, said:

Investors should be alert to the risk of old-school frauds, like oil and gas schemes, masquerading as innovative blockchain-based ICOs.

SEC Going Hard After ICO Fraudsters was originally found on [blokt] – Blockchain, Bitcoin & Cryptocurrency News.