The United States Securities and Exchange Commission (SEC), has fined TokenLot and its founders more than $550,000 for doing business in the U.S. as unregistered broker-dealers. The regulatory watchdog has also slapped them with officer-director bar, amongst other penalties, according to a Finance Magnates report on September 11, 2018.
TokenLot on the SEC Black Book
TokenLot, an initial coin offering (ICO) project that claims to be a registered, Michigan-based “ICO Superstore” focused on making it easy for crypto enthusiasts to research and invest in ICOs of their choice, have agreed to pay the SEC over $550,000 in charges for functioning as unregistered broker-dealers.
Per sources close to the matter, the startup and its founders, Lenny Kugel and Eli L. Lewitt have also received a lifetime officer-director bar, lifetime penny stock bar, and have been ordered to desist from violating the federal securities laws.
As stated in the SEC order, TokenLot and its owners engaged in the sales of securities cryptocoins without obtaining the relevant licenses from the commission. The owners of TokenLot have agreed to pay the fine and settle the charges, but they, however, did not deny or accept the SEC’s allegations.
The ICOs Controversies Continues
In 2017, TokenLot organized a fundraiser for the development of its blockchain-based ICO superstore. The startup went ahead to launch its platform and served as a one-stop shop for ICO tokens.
Interestingly, the Confido ICO that succeeded in generating $375,000 before its founders pulled an exit scam, was organized by TokenLot and to date, nothing has been heard from the scammers.
While initial coin offerings are no doubt a quicker and more accessible means of raising funds for credible distributed ledger technology (DLT) projects, as compared to initial public offerings (IPOs), bad actors have made ICOs arguably the most controversial fundraising means of our time.
As previously reported by BTCManager on August 30, 2018, the North American Securities Administrators Association (NASAA) which launched its sanitization exercise aimed at hammering down fraudulent ICOs dubbed “Operation Cryptosweep,” has already carried out an impressive 200 ICO fraud investigations since its launch.
While the SEC has made it clear it’s ready to work with ICO project organizers who are willing to do things the right way, the agency has noted that a host of these startups remain very reluctant to come under the SEC umbrella despite their offerings being securities.