The US Securities and Exchange Commission (SEC) has charged a token listing website with illegally promoting crypto-securities. The website did not disclose that it was paid by the token issuers to profile their coin offerings.
The SEC charges the website that advertises security tokens without clarifying which tokens are securities
The US SEC announced on Wednesday that a token listing website had been “charged with improperly promoting digital securities.” The Commission also stated that it had already settled charges against the operator of the website.
Coinschedule.com was a popular website that “profiled offerings of securities for digital assets,” the SEC described, adding that its operator was a UK-based company called Blotics Ltd August 2019, during which time US visitors made a significant portion of web traffic.
The website provided details on each profiled Initial Coin Offering (ICO), including links to the token issuers’ websites and a “Trust Score”. The platform claimed that this rating “reflects its assessment of the ‘credibility’ and ‘operational risk’ for each digital token offering based on a ‘proprietary algorithm’.” However, the commission claimed:
In reality, the token issuers paid Coinschedule to profile their token offerings on Coinschedule.com, a fact that Coinschedule did not reveal to visitors.
The SEC alleges that the British company “violated the anti-touting provisions of federal securities laws by failing to disclose the compensation it received from the issuers of the digital asset securities it profiled”.
Kristina Littman, Head of the Cyber Unit of the SEC Enforcement Division, stated that “Coinschedule presented potential investors with seemingly independent profiles of token offers, even though these were actually bought and paid for by token issuers”. She emphasized: “The Securities Act, which prohibits the promotion of securities against compensation without corresponding disclosure to investors, is clear and has been in force for a long time.”
The commission stated: “Without admitting or denying the SEC’s findings, Blotics has agreed not to commit or cause future violations of the anti-touting provisions of the federal securities laws and to pay $ 43,000 plus pre-trial interest. and a fine of $ 154,434. “
Following the settlement, two SEC commissioners issued a joint statement on the case. Commissioner Hester Peirce and Commissioner Elad Roisman said:
We agree with our colleagues that promoting securities without disclosing the fact that you will be paid and how much is against Section 17 (b). However, we are disappointed that the commission’s settlement with Coinschedule did not explain which digital assets touted by Coinschedule are securities.
What do you think of the SEC’s actions? Let us know in the comment section below.
Photo credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer of liability: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement for any product, service, or company. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author are directly or indirectly responsible for any damage or loss caused or allegedly caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.