At a time in crypto history, ICOs were all the rage and were the predominantly preferred method of raising funds for upcoming or established cryptocurrency firms and this helped usher in a new era of growth within the industry as well as more capital inflow. However, that time also was riddled with many fraudulent ICOs or poorly registered ones and because many were quick to rush onto the ICO wave, there were a lot of problems with the SEC having to shut down dozens of ICOs for these reasons. Even though they are no longer the rage in the crypto industry, there are still some incidences of the SEC having to get involved in them.
The latest of these complaints has been leveled against Jonathan C. Lucas, who is accused of running an unregistred ICO. He is also famous for being the founder of Fantasy marketplace which is an adult market place.
According to official docs published on September 23, 2019 Lucas had received $63,000 from investors for an ICO for the Fantasy market place which is unregistered and unauthorized.
“As alleged in the complaint, Lucas made numerous materially false statements in a whitepaper and online to induce investors to participate in the ICO. Among other alleged misstatements, Lucas claimed that a “working-beta” version of the company’s adult-entertainment platform existed when one did not, presented a fictitious management team, and misrepresented his own experience. After garnering media attention over investor complaints, the complaint states, Lucas returned the funds raised to investors,” the document said.
The complaint was filed in the Manhattan District Court in the United States and since Lucas had consented without admitting or denying the charges, he was charged a civil fine of $15,000 for securities fraud. While ICOs are not as popular in recent times, they are obviously still somewhat attractive to investors and the SEC is still having to manage and regulate them and in some cases, shut down those that are unsuitable.