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ulent ICO
The U.S. Securities and Exchange Commission (SEC) has served a lawsuit to Richard Heart, founder of the distributed autonomous organization Hex, for allegedly perpetrating “fraudulent schemes” related to its 2017 initial coin offering (ICO). According to a court filing from March 10, the lawsuit claims that Heart and his companies, “Ethereum Capitalist LLC, High Return Bitcoin Fund LLLP, and Collabserv LLC,” raised more than $5 million by “selling securities that lacked registration with the SEC or an exemption for the registration requirements.” Further, the lawsuit claims that Heart and his companies “engaged in ‘pump and dump’ and ‘scalping’ schemes to reap profits from those investments.” The SEC is seeking permanent injunctions against Heart and his companies, as well as restitution of funds from investors. It is also seeking civil monetary penalties. The lawsuit comes after the SEC began an investigation into the ICO in 2018. If found guilty, Heart could face up to five years in prison.