The U.S. SEC Stops Registration of American CryptoFed’s Two Digital Tokens
- The SEC has instituted proceedings against American CryptoFed DAO LLC.
- The SEC reveals that the firm failed to provide required data in its registration of two tokens.
- American CryptoFed’s registration of the two tokens is pending verdict.
The Securities and Exchange Commission (SEC) announces it has commenced litigation against American CryptoFed DAO LLC. According to a press release in respect to the proceedings, the SEC says they have stopped the effectiveness of the Wyoming-based organization’s registration of two digital tokens as securities.
Stating the reason, the SEC detailed that on September 16, 2021, American CryproFed indexed a materially defective and misleading registration document. Known as Form 10, the SEC asserts that the firm claims to register two digital tokens as equity securities. The two tokens in question are called the “Ducat” and “Locke” tokens.
Nevertheless, the SEC alleges that Form 10 did not contain certain required information about the two tokens. Besides that, it didn’t disclose about American CryptoFed businesses, audited financial information, management, and financial condition.
On top of that, Form 10 also contains false statements, and there were several omissions and irregularities about whether “Ducat” and “Locke” tokens are securities. The SEC further disclosed American CryptoFed’s supposed intention to distribute, upon the effectiveness of its Form 10, its “Locke ” tokens to the public using a Form S-8.
To clarify, Form S-8 is a registration form used for securities offered to employees through employee benefit plans. On that note, CryptoFed failed to declare that the “Locke” tokens may not legally be distributed pursuant to a Form S-8.
Speaking on the matter, Chief of the SEC Enforcement Division’s Cyber Unit, Kristina Littman says,
Issuers attempting to raise money from the public must provide the information necessary for investors to make informed decisions. We allege American CryptoFed made materially misleading statements and failed to provide legally required information in its registration form.
At the moment, American CryptoFed’s registration of the two tokens is awaiting a verdict by an administrative law judge on whether to reject or suspend the registration of the tokens. Additionally, the SEC’s Office of Investor Education and Advocacy published an Investor Alert warning investors about claims that the SEC has approved offerings.
Read more: https://coinquora.com/the-u-s-sec-stops-registration-of-american-cryptofeds-two-digital-tokens/
Text source: News – CoinQuora – Latest Cryptocurrency and Block
