U.S. SEC charges 2 Florida men and their firm for selling digital tokens


WASHINGTON, Aug 6 - The U.S. Securities and Exchange Commission charged two Florida men and their firm for failing to register sales of more than $30 million of securities and in the regulator's first case to fool investors involving decentralized finance securities.

Blockchain Credit Partners and founders Derek Acree and Gregory Keough sold digital tokens the SEC deemed securities without registered with the regulator through their platform DeFi Money Market from February 2020 to February 2021, the SEC said in a statement. The executives allegedly told investors interest and profits would be used to buy real world assets, which they could not do because of the token prices volatility.

Keough and Acree agreed to pay penalties in total of $125,000. Blockchain Credit and the founders also agreed to give up $12.8 million in ill-gotten gains as part of a cease-and-desist order agreed with the SEC.

The Cayman Islands-based company Keough and Acree, who did not deny the findings of the SEC, could not be reached immediately for comment.

Cryptocurrencies reached a record capitalization of $2 trillion in April as more investors stocked their portfolios with physical tokens and peer-to-peer platforms such as DeFi are increasingly popular, but oversight of the market remains patchy. The director of the SEC earlier called on lawmakers to give the regulator more powers to oversee crypto lending and DeFi sites.