SEC Sues VERI Token Issuers in Its Latest Push Against Fraud ICOs

The Securities and Exchange Commission (SEC) has filed a legal complaint against a New York resident and two companies controlled by him – Veritaseum Inc. and Veritaseum LLC – for conducting an unregistered token sale.
According to the court documents shared by Hindenburg Research, the two firms were charged for conducting a (ICO) between late 2017 and 2018. The securities watchdog alleged that the companies, with the help of the promoter Reginald Middleton, raised $14.8 million through the sale of VERI tokens.

The SEC also charged the firm for material misrepresentations and omissions to the investors of the coin and has requested the court to issue an emergency freeze on the defendants’ related assets.
“This is an emergency action to stop the Defendants’ further dissipation of approximately $8 million of investor proceeds that remain from the approximately $14.8 million they fraudulently raised in 2017 and early 2018 in an offering of digital securities,” the court document stated.
Raising millions making false promises
The defendants sold the token by for receiving consultation and advisory services along with the access to research. Launched on the Ethereum blockchain, the token was pegged to Ether at 30:1 ratio.
Moreover, the agency requested the New York district court to issue an order, preventing the firms’ attempts to interface in the investigation by concealing or destroying any documents.
“On July 30, 2019, the day Commission staffs informed Defendants’ counsel that the staff was likely to recommend that the Commission approved the filing of an enforcement action against Defendants, and on July 31, 2019, Defendants moved more than $2 million in remaining the offering proceeds from a blockchain address they controlled into other addresses,” the complaint by the SEC stated.
The SEC is constantly attempting to bust controversial ICOs which fall under the securities category or committed any fraud. It recently dragged the Canadian messaging platform Kik for .

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