US SEC Requests Court to Order a Freeze on Assets Connected to an Alleged $15 million ICO Fraud




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SEC requests freeze on Veritaseum’s assets

The US SEC recently filed a complaint against Reginald Middleton, a New-York resident and his two firms, Veritaseum Inc. and Veritaseum LLC. According to the agency, the two companies conducted a fraudulent and unregistered ICO within the past two years. Seeking to stop the firms’ activities, the SEC requested a US District Court to issue an emergency freeze on the man’s assets. A research firm unveiled this news through a blog post on August 12.

In the blog post, the SEC notes that the defendant raised approximately $14.8 million in an ICO. Per the agency, the ICO ran from 2017 to early last year. The SEC alleged that the ICO had material misinterpretations and omissions that misled investors. Moreover, the entity believes that Middleton and his two firms still hold investor proceeds worth approximately $8 million. With this in mind, the SEC requested an instant prayer for relief to freeze these assets.

VERI Tokens

On top of this, the commission requested the court to order Middleton from interfering with its access to relevant documents. Through this order, the SEC seeks to bar the defendant from destroying evidence. Furthermore, the entity requested to take an accelerated discovery and escrow crypto via a third party.

The defendants sold tokens dubbed VERI. According to a publication, the VERI tokens ran on the Ethereum blockchain and were pegged to ether (ETH) in a 30:1 ratio.

This is not the first case that the SEC has introduced in court this year. Prior to this, the SEC took Kik Interactive to court over its Kin token offering. However, everything has not been going smoothly for the commission in this case. Kik’s lawyers recently bashed the agency for presenting a weak and misleading case in court. Per Kik’s lawyers, the SEC does not have a have good evidence to back its accusations.

They noted,

If the Commission had strong evidence that Kik offered or promised TDE purchasers an opportunity to profit from Kik’s efforts, as part of a common enterprise, the Commission would have simply outlined all the relevant facts and let those facts speak for themselves. Instead, the Commission’s Complaint reflects a consistent effort to twist the facts by removing quotes from their context and misrepresenting the documents and testimony that the Commission gathered in its investigation.

Do you think SEC’s efforts will help end fraudulent schemes in the crypto space? Let us know in the comments below.