SEC Accused Loci Inc. of Fraud
The US Securities and Exchange Commission (SEC) accused Loci Inc. and its CEO John Wise of fraud and conducting an unregistered securities sale of LOCIcoin in 2017 and 2018.
According to the SEC, Loci Inc and John Wise agreed to destroy their tokens, remove LOCIcoin from exchanges, and never offer digital asset securities again. In addition, they must pay a $7.6 million fine to refund the value of the Ethereum tokens they received for the sale.
Loci Inc. bills itself as “a platform for IP discovery, creation and exchange”. The LOCIcoin token had to be used to subscribe and trade for intellectual property on the company’s software platform for researching patents, InnVenn.
At the time of writing, according to Etherscan, the LOCIcoin token was trading at $0.003 and it’s fully diluted market cap was $295,422.
Loci Inc and its CEO John Wise assured investors that LOCIcoin would cost a minimum of $2.49. This value was supposed to rise as the demand for InnVenn increased.
But according to the SEC, those promises were ultimately fraudulent. The Commission said the customer and sales marketing materials were false as Loci never had sales, revenue, or paid users.
The Commission also accused Loci Inc. that the company did not register its initial coin offering as a securities offering.
The US Securities and Exchange Commission is well known for its rigour in everything related to cryptocurrencies. Most recently, the agency delayed the decision on VanEck Bitcoin Trust’s application for a Bitcoin ETF that was supposed to buy Bitcoins and sell its shares to investors.
Also, the SEC has filed a lawsuit against several US citizens over “promoting the cryptocurrency pyramid BitConnect.” The commission demands to impose an injunction on the accounts of Trevon Brown, Craig Grant, Ryan Maasen and Michael Noble for promoting a global offering of securities for the unregistered digital assets.