The U.S. Securities and Exchange Commission has settled charges against Virginia-based Loci, the developer of software platform InnVenn, and its CEO, John Wise, for allegedly “making materially false and misleading statements in connection with an unregistered offer and sale of digital asset securities,” according to a statement.

Fast Factsf

  • According to the SEC, Loci and Wise allegedly raised US$7.6 million through an “unregistered and fraudulent initial coin offering” of LOCIcoin tokens from August 2017 to January 2018. Wise also allegedly misused $38,163 in investor proceeds for personal expenses.
  • Loci and Wise have agreed to an SEC cease-and-desist order, according to the regulator. The SEC’s order also imposes a US$7.6 million civil penalty against Loci.
  • “Loci and its CEO misled investors regarding critical aspects of Loci’s business,” said Kristina Littman, chief of the SEC enforcement division’s cyber unit. “Investors in digital asset securities are entitled to truthful information and fulsome disclosures so they can make informed investment decisions.”
  • U.S. regulators have imposed US$2.5 billion in penalties on crypto businesses since 2009, with the SEC responsible for the lion’s share, at US$1.69 billion, according to Elliptic, a blockchain analysis company. The enforcement actions were related to fraud, breaches of anti-money laundering regulations, offers of unregistered securities and sanctions violations.