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SEC Charges DeFi-Based Projects Over Alleged $30M Fraud Case

SEC-Charges-DeFi-Based-Projects- Over-Alleged- $30M-Fraud-Case
  • The US SEC has charged DeFi project and two Florida residents for allegedly offering and selling over $30 million fraudulent unregistered securities.
  • This marks the first SEC securities case involving DeFi projects.

The US Securities and Exchange Commission (SEC) has charged Blockchain Credit Partners over alleged offering and selling of $30 million unregistered securities.

Besides, this represents the first SEC securities case that involves DeFi-based technology. However, not DeFi technologies alone, but the SEC also charged several different companies alongside. To mention a few, the SEC said that it charged blockchain Credit Partners and the DeFi Money Market.

SEC Enforcement Division’s Complex Financial Instruments Unit chief Daniel Michael said,

The federal securities laws apply with equal force to age-old frauds wrapped in today’s latest technology.

In addition, the US SEC charge decision also involved a few other Florida residents called Gregory Keough and Derek Acree. Based on the report, the Florida citizens allegedly traded more than $30 million of the unregistered securities from February 2020 to February 2021.

Also, citing from the SEC claim, Keough and Acree blatantly gave out false claims that showed how the company was operating with its investors. Meanwhile, they did not even disclose whether they will pay interest for trading mTokens and DeFi Money Market’s DMG governance tokens.

Even more, SEC again mentioned that Keough and Acree issued an interest payment for mToken using their funds and other funds from Blockchain Credit Partners. As a result of the SEC charge implementation, DMG token price dropped drastically at that time.

Furthermore, as per the SEC, both Keough and Acree are now on agreement terms to stop the order of the DMG token offerings of over $12.8 million as well as $125,000 penalties. More so, both persons have funded the DeFi Money Market’s smart contracts for investors to redeem their funds.

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Collins Adane is a writer who follows the crypto industry closely. He loves fish stew and Real Madrid. He believes in cryptocurrency’s potential to transform the money landscape in his native country Ghana.