SEC sued Chicago Crypto Capital for allegedly selling $1.5 million in cryptocurrencies
A Chicago-based cryptocurrency investment firm and three of its employees were sued by the U.S. Securities and Exchange Commission (SEC) for allegedly selling $1.5 million worth of cryptocurrencies that weren’t registered with the securities watchdog. Chicago Crypto Capital, its owner, and two salesmen are being prosecuted for their illegal sale of BXY tokens to investors.
SEC Sues ‘Chicago Crypto Capital,’ Employees for Illegally Selling BXY Tokens
Chicago Crypto Capital (or CCC) owner Brian Amoah and salesmen Darcas Oliver Young and Elbert Elliott sold cryptos called BXY tokens to 100 investors, many of whom had no prior crypto experience, from August 2018 to September 2019. They misled those investors about how they were handling the token, the complaint said.
BXY is a token aligned with the defunct crypto exchange Beaxy, according to the complaint. Hoping to raise capital and create a strong user base, Beaxy sold investors a token that it said could generate ICO-era high gains. It had an agreement with CCC to sell them as well. CCC pocketed 3 cents of every 5-cent sale.
According to the lawsuit, CCC offered BXY to novice investors without disclosing the company’s kickbacks. Later, CCC failed to send BXY tokens to certain of its customers. The SEC accused the group of acting as unregistered brokers and fraudsters in violation of U.S. securities law. It is seeking to bar them from offering crypto securities.
The prosecution is the latest move by an investment regulator who has vowed to take tough action against suspected misbehavior in the cryptocurrency industry. Also on Wednesday, Gary Gensler, the head of the SEC, reiterated his view that “the vast majority” of cryptocurrencies are securities and fall under his jurisdiction.
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