The United States Securities and Exchange Commission (SEC) has made a move towards the crypto space. On Friday, the Wyoming-based decentralized autonomous organization (DAO) launched administrative action against American CryptoFed. In particular, the SEC is in an effort to suspend the supply sale of the Ducat and Locke altcoin projects. Here are the details…
SEC takes action on two altcoins
“We want to determine whether a stop order will be issued to suspend the registration of the supply and sale of two crypto assets, the Ducat token and the Locke token,” the SEC said in a statement on Friday. Ducat token is an algorithmic stablecoin while Locke is a management token created by American CryptoFed. cryptocoin.com As we reported, UST was also an algorithmic stablecoin, which has crashed in recent months.
The US securities regulator’s action comes a year after American CryptoFed filed a Form S-1 registration before the Commission. Form S-1 is an initial registration required for companies wishing to offer new securities to the public. American CryptoFed also opened a Form 10 registration attempting to register tokens as stock. But the SEC rejected the records.
CEO said “we have refuted allegations”
In November last year, the regulator stopped the registration of the two tokens, claiming that the DAO did not disclose its “business, governance and financial conditions.” This includes unaudited financial statements. The regulator said the firm’s documents also “contain significantly misleading statements and omissions, including inconsistent statements about whether the tokens are securities.”
That same month, the regulator issued an order review to determine whether a cease and desist order should be issued against the DAO’s registration. However, in a statement on Friday, the SEC claimed that American CryptoFed did not cooperate in its registration filing review. The firm’s CEO, Marian Orr, said it refuted criticism raised by the regulator last year.
Recent developments
According to a recent SEC filing, American CryptoFed wrote to the Commission in May 2022 that it will continue to issue the tokens in July 2022. Instead, the firm applied to withdraw its registration from the Commission in June. The SEC stated that “accepting the withdrawal request does not serve the public interest.” He also said that he rejected the application on the grounds that “it is not suitable for investor protection”.
In the new SEC statement, David Hirsch, Head of Enforcement Division Crypto Assets and Cyberspace, made the statement. He stated that the issuer wishing to present crypto assets as securities transactions “must provide the SEC with the necessary information.” That said, the American CryptoFed did not comply with the disclosure rules of the securities laws. He also noted that the company said the securities transactions they were trying to register were not actually securities transactions.
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