A comparatively small initial coin offering project is charged by the SEC for an unregistered security offering, in addition to allegations of fraudulent claims.
The Securities and Exchange Commission (SEC) has charged Sergii Grybniak, the founder of the initial coin offering (ICO) project Opporty, according to a Jan. 21 press release. Despite raising approximately $600,000, the commission targeted Grybniak for falsely declaring the project as “100% SEC compliant.”
Opporty launched its ICO between September and October 2018. The project purported to provide a “blockchain-based ecosystem for small businesses and their customers,” primarily in the United States. The platform was meant to be a place where small businesses could list their services and enter into agreement via smart contracts.
The ICO for the OPP token raised $600,000 from approximately 200 investors, some of whom were located in the U.S.
While the SEC’s primary charge is for conducting an unregistered sale of securities, it also claims that the project made many misleading and false statements to encourage investment.
Among them, Opporty claimed to have onboarded thousands of “verified providers” to do business on the platform, the majority of which “had expressed no such willingness,” the SEC complaint reads.
A claim of having more than 17 million businesses in its database was revealed to be a simple purchase of a third-party catalog.
Finally, the SEC alleges that the project lied about a partnership with a “major software company.”
The accused founder is a resident of Brooklyn, against whom the SEC seeks injunctions against future digital offerings, the return of all ICO money and civil penalties.
Inconsistent targeting from the SEC
The case against Opporty is an outlier given the caliber of projects previously targeted by the SEC.
Notable cases include the litigation for Telegram’s $1.7 billion ICO, Kik’s offering for $97 million, and recently, Boaz Manor’s $30 million token sale.
By contrast, other projects received far more lenient treatment. The SEC settled with EOS parent company Block.one for $24 million, out of a $4 billion ICO. Debates around XRP’s security status did not yet result in an investigation by the regulator. Other projects, such as TurnKey Jet, received no-action letters by the SEC.
While the SEC pledged to offer more lenient and flexible treatment to crypto projects in 2020, it appears that some projects will remain under scrutiny.
One possible distinction for Opporty is that, in addition to offering unregistered securities, the project allegedly lied about its achievements. In addition, unlike many similar ICOs, the offering did not explicitly exclude U.S. investors from participating.
Source: , CoinTelegraph
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