The US regulator has sued 2 altcoin projects for manipulating prices. Cryptocurrency-focused companies have spread the news of a fake investment of 10 billion dollars in the past years.
SEC accuses these 2 altcoin projects of ‘pump and dump’
Bermuda-based Arbitrade and Canada-based Cryptobontix are facing legal action. According to a press release, they used the token for their own plans by inflating the price of a cryptocurrency called “Dignity” or “DIG” with fake news. According to the complaint, the two firms publicized that Arbitrade purchased $10 billion worth of gold bullion between May 2018 and January 2019. They also claimed that the company plans to support every $1 DIG token that is issued and sells to investors for $1.
In reality, however, the SEC alleges that the gold purchase was a scam to boost demand for DIG, allowing the company’s principals to sell at least $36.8 million in DIG at inflated prices, including to US investors. The SEC accuses the defendants of violating the fraud protection and securities registration provisions of the federal securities laws. The complaint seeks permanent injunctive relief, acquittal, and pre-trial interest and fines against all defendants, as well as civil servants and directors bar associations against individual defendants.
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