The Securities and Exchange Commission today instituted proceedings against American CryptoFed DAO LLC, a Wyoming-based organization, halting the effectiveness of the company\u2019s registration of two digital tokens as securities.<\/p>\n
In the SEC\u2019s order instituting proceedings, the Enforcement Division alleges that on Sept. 16, 2021, American CryptoFed filed a materially deficient and misleading registration form known as a Form 10, which purported to register two digital tokens issued by American CryptoFed \u2013 called the \u201cDucat\u201d and \u201cLocke\u201d tokens \u2013 as equity securities.\u00a0 The Enforcement Division alleges that the Form 10 failed to contain certain required information about the two tokens as well as about American CryptoFed\u2019s business, management, and financial condition, including audited financial statements.\u00a0 The Enforcement Division further alleges that the Form 10 contains materially misleading statements and omissions, including inconsistent statements about whether the \u201cDucat\u201d and \u201cLocke\u201d tokens are securities, and statements relating to American CryptoFed\u2019s purported intention to distribute (upon the effectiveness of its Form 10) its \u201cLocke\u201d tokens to the public using a Form S-8, which is a registration form used for securities offered to employees through employee benefit plans, without disclosing that the \u201cLocke\u201d tokens may not legally be distributed pursuant to a Form S-8.<\/p>\n
\u201cIssuers attempting to raise money from the public must provide the information necessary for investors to make informed decisions,\u201d said Kristina Littman, Chief of the SEC Enforcement Division\u2019s Cyber Unit.\u00a0 \u201cWe allege American CryptoFed made materially misleading statements and failed to provide legally required information in its registration form.\u201d<\/p>\n
The SEC\u2019s order institutes administrative proceedings to determine whether it is necessary and appropriate for the protection of investors to deny or suspend the effective date of American CryptoFed\u2019s registration of the \u201cDucat\u201d and \u201cLocke\u201d tokens.\u00a0 American CryptoFed\u2019s registration of the two tokens is stayed pending a determination by an administrative law judge whether to deny or suspend the registration of the tokens.<\/p>\n
The SEC\u2019s investigation, which is ongoing, is being conducted by Martin Zerwitz and Michael Baker of the Cyber Unit.\u00a0 The case is supervised by Deborah Tarasevich, an Assistant Director in the Cyber Unit, and Ms. Littman.\u00a0 The litigation is being conducted by Christopher Bruckmann, Mr. Zerwitz, and Mr. Baker.<\/p>\n
The SEC\u2019s Office of Investor Education and Advocacy has issued\u00a0an Investor Alert<\/a>\u00a0warning investors about claims that the SEC has approved offerings. Investors can find additional information about investments involving digital assets<\/a> on\u00a0Investor.gov.<\/p>\n","protected":false},"excerpt":{"rendered":" SEC instituted proceedings against American CryptoFed DAO LLC, a Wyoming-based organization, halting the effectiveness of the company\u2019s registration of two digital tokens as securities.\u00a0<\/p>\n","protected":false},"author":2,"featured_media":4186,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[812,1123,14],"tags":[898,1688,1689,1690,1691,888],"class_list":["post-7257","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptocurrencies","category-finreg","category-financial-news","tag-crypto","tag-cryptofed","tag-digital-tokens","tag-ducat","tag-locke","tag-sec"],"yoast_head":"\n