The U.S. Securities and Exchange Commission (SEC) said in a press release about Bermuda-based Arbitrade Ltd and Canada-based Cryptobontix and their executives, Dignity (DIG) a named altcoin filed a criminal complaint alleging that they were running a pump-and-dump scheme involving
SEC Claims This Dignity Altcoin Fraudulently Inflated Its Price
According to the filing, the two firms claimed that between May 2018 and January 2019, Arbitrade purchased and owned $10 billion worth of gold bullion, and that the company plans to back each DIG token it sells to investors with $1 worth of gold.
However, the SEC alleges that the actual purchase of gold was a ruse to increase demand for DIG, allowing the company’s executives to sell at least $36.8 million in DIG at inflated prices, including to US investors.
The SEC accuses the defendants of violating the anti-fraud and securities registration provisions of the federal securities laws.
The petition seeks permanent injunctive relief, damages plus interim interest and judicial fines against all defendants, as well as an executive ban on individual defendants.
As it is known, the US Securities and Exchange Commission cryptocurrency claims that many altcoins other than Bitcoin and Ethereum in its market are actually securities and fall within their jurisdiction.
There has been a long-standing competition between the SEC and the CFTC over the regulation of cryptocurrencies.
*Not investment advice.
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