The U.S. Securities and Exchange Commission (SEC) has charged Chicago-based crypto investment firm Chicago Crypto Capital (CCC) and three of its staff to court. The move follows after CCC allegedly sold $1.5 million worth of BXY tokens to no less than 100 investors.
SEC Calls Out Chicago Crypto Capital, Alleges Fraud
According to the SEC, the BXY tokens were not registered with it at the time they were sold. This was between August 2018 to September 2019.
SEC also implicates Chicago Crypto Capital owner Brian Amoah and two salesmen identified as Elbert Elliot and Darcas Oliver Young in its complaint. The top regulator claims that the three sold the tokens to investors who knew little or nothing about crypto. It also claims that they misled the investors about the firm’s handling of the tokens.
Per SEC’s complaint, BXY is a native token of the now-defunct crypto exchange Beaxy. The SEC claims it has evidence that Beaxy was in a sales agreement with CCC over the BXY tokens. The partners had sold the tokens to investors on the belief that they would see massive gains. And for every 5-cent sale, CCC made 3 cents off of it.
Apart from misinforming the investors, SEC also claims that CCC did not hold on to its end of the bargain. At least, not with some buyers. The investment company failed to deliver BXY tokens to some investors who already paid.
Overall, the SEC believes that the group acted no different from fraudsters, while their actions blatantly violated the U.S. securities law. Hence, the move by the SEC to ban CCC from offering crypto securities.
This case is the latest in a series of renewed crackdowns as regulators move to curb the criminal uses of crypto. It also comes on the heels of SEC Chair, Gary Gensler, holding his longtime position that “the vast majority” of cryptocurrencies are securities and must be registered under his jurisdiction.