The US SEC recently announced that it had charges Sergii Grybniak and his company Opporty International for conducting an illegal ICO. According to the SEC, Sergii raised around $600,000 from over 200 investors via Opporty international Inc. During the ICO, the suspect sold the OPP Tokens.
Sergii marketed the Opporty ICO as a vehicle to raise money for the development of a blockchain-powered ecosystem for small businesses and their customers. Sergii marketed the platform as being primarily focused on US customers and small businesses. According to the information provided by Opporty, small businesses would be able to list on the platform and enter into agreements with customers using smart contracts. They would then be able to transact using OPP Tokens.
The SEC complaint alleges that Sergii made numerous false claims to investors via social media, the company’s website, and other online platforms accessible in the US. Sergii also promoted the ICO in person at various blockchain and digital asset conferences that were held in the US. One of the claims that Sergii made was that the SEC had approved of the ICO. However, the company had never registered its token sale with the SEC.
Another false claim made by Opporty was that it had over 17 million small businesses in the US in its catalog. However, Sergii and Opporty merely purchase the database from a third party, something that was not disclosed to the buyers of the OPP Token.
Opporty and Sergii also claimed that a major software firm had endorsed them. They even used the logo of the firm on the Opporty website. However, the company had not given Opporty consent to use their trademarked logo.
According to the SEC complaint, OPP Tokens were sold via Simple Agreement for Future Tokens. As a result, they were investment contracts, which qualify them as securities. The SEC complaint said this violated federal securities laws. Sergii was charged with aiding and abetting Opporty in its violation of these laws.
The SEC is seeking a permanent injunction on all activities by Opporty. Besides that, it is seeking civil penalties against Opporty and Grybniak. It also wants Grybniak barred from holding the position of an officer or director in a public company. They are also seeking disgorgement plus interest against the defendant and his company. Clever Solution Inc., which is controlled by Sergii, is also named in the complaint.
SEC is going after Fraudsters in the Crypto Space
The SEC complaint claims that Sergii carried out his fraudulent activities from September 2017 and October 2018. This is about two years ago. It indicates that no matter how far back fraud occurred, the SEC is serious about bringing fraudsters to book.
While it is not known how many fraudulent ICOs the SEC is investigating, it is a lot. They began clamping down hard on ICOs in 2018 after the prevalence of fraud in the sector. Since then, many ICOs have opted to move their activities outside of the US. One of the largest ICOs to be pursued by the SEC was the Telegram ICO.
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