Regulation News

SEC to Freeze Assets Connected with $ 15M ICO Fraud

The SEC case filed against the New York-based man says that he performed transactions with a fraudulent and unregistered ICO. The SEC also requests that the US District Court issues an emergency freeze on the defendants’ assets, including those of his two companies.

The documents for a jury trial requested by the SEC in a post yesterday was released by Hindenburg Research institute. According to the document, the SEC is formally filing a legal complaint suite against Reginald Middleton and his companies.

Request for escrow, relief, and expedited discovery

The Commission claims that Reginald Middleton and his two companies made approximately $14.8 million with a fraudulent and unregistered ICO from late 2017 to early 2018. The commission also alleges that material misrepresentations and omissions were raised to investors.

The SEC claims that about $8 million of users proceeds still remain from the ICO. They demand immediate relief in order to freeze the defendants’ assets. The commission also requested that the US District Court issue an order to prevent Reginald Middleton, from interfering with the SEC’s access to important documents to the case.

It was also discovered that the companies sold tokens called VERI. It was apparently issued on the Ethereum blockchain and pegged to Ether (ETH) at a 30:1 ratio. Reginald Middleton reportedly presented VERI as a utility token. The token could be redeemed for other benefits such as consulting and advisory services and unlimited access to research.

Other cases by SEC

According to reports, the commission has an ongoing legal battle with Kik Interactive over its Kin token offering. In recent time, Kik’s lawyers have questioned the commission for purposefully presenting a weak case, which Kik suggests the commission is doing because it simply does not have good evidence to back its allegations.

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