The Securities Exchange Commission announced on Wednesday, September 14, that filed a complaint against a crypto broker from Chicago. Chicago Crypto Capital LLC (“CCC”), its owner, and several other individuals were charged with violating the Securities Act of 1933 (“Securities Act”) with ICOs conducted between 2018 and 2019.
SEC Sues Chicago Crypto Capital
Since then DAO Report 2017, the SEC has been pursuing legal action against various crypto companies regarding initial coin offerings (ICOs), which the commission considers securities. Chicago Crypto Capital found itself in the crosshairs of the SEC on Wednesday because of the ICO campaign that took place between 2018 and 2019.
According to the SEC’s complaint, from approximately August 2018 to November 2019, CCC, Amoah, Young, and Elliott acted as unregistered broker-dealers and conducted unregistered BXY token offerings, illegally obtaining at least $1.5 million from approximately 100 individuals , many of whom have no experience investing in crypto assets. BXY’s offer is not registered with the Commission and does not meet the exemption from registration, and none of the accused is registered with the Commission as a broker.
Along with the company, the commission prosecuted its founder Brian Amoah, as well as two former Darcas employees Oliver Young and Elbert “Al” Elliott. according to announcementYoung settled with the SEC and agreed to pay several fines and penalties.
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Unregistered ICO hunters
Chicago Crypto Capital is far from the only digital asset company under pressure from the SEC over its offering. Earlier this year, the commission moved to Investigate Binance through its ICO. Perhaps the most famous case of a dispute over whether certain digital assets are securities happened between the SEC and Coinbase.
The company was accused of listing unregistered securities, as well as insider trading. The attack does not seem to be the end of seeing how Gensler not only believes that crypto and DeFi, in general, need more regulation but also it is hinted that assets like Ethereum can be considered as securities.
The Chairman’s current interpretation of whether various digital assets are securities or not remains controversial. Coinbase, for example, has not only remained adamant that it does not list securities but has also begun to regulate politics.
This Wednesday they announced they are issuing scorecards for various representatives. This initiative hopes to bring pro-crypto lawmakers to office and hopefully create clear rules on the legal status of digital assets.
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About the author
Tim Fries is the founder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim is a Senior Associate in the investment team at RW Baird’s US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.