Opporty International, Inc charged by SEC for fraudulent $600,000 ICO

The U.S. Securities and Exchange Commission (SEC) is taking action against yet another ICO issuer: blockchain-based marketplace Opporty International, Inc.

opporty-international-inc-charged-by-sec-for-fraudulent-600000-ico
Image via Wikipedia

The SEC released a complaint alleges that from September 2017 to October 2018, Opporty International, Inc. and its founder and sole owner Sergii Grybniak did a “fraudulent” sale of digital assets called OPP Tokens, gaining around $600,000 from roughly 200 investors in the U.S. and elsewhere. And the defendants did not register the tokens with the SEC.

Moreover, the SEC states that Grybniak and his company tricked investors over the sale, releasing material misrepresentations and omissions to investors and joining in other deceptive conduct during the offering.

For example, Oppty is claimed to have falsely promoted the platform as already having over 6000 “identified providers” ready to use the platform. The complaint read most of these purported ‘verified providers’ had shown no such willingness and were not contributing any content to Opporty’s platform.

opporty-international-inc-charged-by-sec-for-fraudulent-600000-ico
Logo of Opporty International, Inc. Image via LinkedIn

The company was also allegedly claimed to have 17 million small U.S. businesses in its catalog, lying to investors that all these firms were genuine businesses able to do business on the platform. In fact, the firm had only bought a database of entity and individual profiles; and disclosed to investors in the token. If the firm had registered the sale with the SEC, it would have meant investors could have been provided sufficient, accurate information relating to the ICO.

Oppty’s tokens were sold through purchase agreements called “simple agreements for future tokens” (SAFTs), a framework is famous as a way to avoid such regulatory actions. As such, the firm constituted investment contracts and securities.

The SEC is seeking to force the defendants to return the “ill-gotten profits” from the ICO, postpone future issuances of securities and pay civil penalties. Besides, resident Grybniak will be banned from acting as director of a public company if the SEC wins its arguments. The SEC suggests that the Eastern District of New York would be the appropriate court venue for the case to be heard.

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