SEC sues company for selling digital tokens that should have been registered

The U.S. Securities and Exchange Commission brought its first case to the decentralized finance market, alleging a company sold digital tokens that should have been registered with Wall Street regulator.

The SEC sued Cayman Islands-based Blockchain Credit Partners and two of its top executives for illegally stocking securities with its DeFi Money Market platform from February 2020 to February 2021, according to a news release on Friday. The company sold more than $30 million worth of two types of tokens that are registered with the SEC as securities, which the SEC considers to be investment firms.

'Full and honest disclosure remains the cornerstone of our securities laws - no matter what technology are used to offer and sell these securities, said SEC Enforcement Director Gurbir Grewal in the statement.

The DeFi market has exploded in recent months by allowing traders to execute transactions directly on the blockchain without leaving brokers, banks, crypto exchanges or other intermediaries.

What is the best and recent SEC Chair Gary Gensler? This week he said that digital tokens that mirror the price moves of stocks likely need to register with the regulator and comply with its investor protection rules. Gensler has asked House lawmakers to give the SEC clear authority to investigate crypto trading venues. In the meantime, he pledged to use the existing powers to crack down in the industry through enforcement measures.

The SEC confirmed that Billion Dollar Recharge Partners' Derek Acree and Gregory Keough both will pay penalties of $125,000. The executives and the company also agreed to pay $2.8 million in disgorgement. They settled the case without admitting or denying wrongdoing.