Regulatory Series on Cryptocurrencies: US SEC Hammers Lobbyist CEO of AML Bitcoin With Fraudulent ICO Project

The regulatory authorities across the globe have been very meticulous on the scope for fraudulent acts by the crypto-space. Especially, time and again, the U.S. SEC has always kept cautionary eye on the crypto regulation, while having embraced the market even fighting to fend off fraud. 

Yesterday, the United States Securities and Exchange Commission (SEC) has charged the 

Issuer, the CEO, and lobbyist with defrauding investors in AML BitCoin. 

What cooked up by AML Bitcoin? A brief run through: 

As per the SEC’s allegation, during the times of huge ICO boom, Rowland Marcus Andrade and his NAC Foundation had raised about $5.6 million in an initial coin offering (ICO) project for AML Bitcoin commenced in August 2017 and performed through 2018. 

The charges follow up on a criminal filing in San Francisco from June 22nd, refer to a “Co-Schemer” who is not traced out in the law suit. 

The SEC’s charges today reveal that individual as Jack Abramoff, a notorious lobbyist who did prison time for corruption between 2006 and 2010, according to the lawsuit. 

Amid stringent regulatory actions by US SEC, we have seen quite a few critics of bitcoin in the past, including the legendary investor Mr. Warren Buffet had constantly bashed on Bitcoin last year and stated that he would never invest in cryptocurrencies as he seemed certain about the cryptocurrencies would come to a bad end and also called rat poison.

For now, the SEC alleges that Nevada-based NAC Foundation managed to raise at least $5.6 million from more than 2,400 investors by selling tokens that could later be converted to AML BitCoin. NAC and its CEO portrayed AML BitCoin as superior to the original bitcoin, with anti-money laundering, anti-terrorism, and theft-resistant technology built into the coin on NAC’s own “privately regulated public blockchain.” The SEC's complaints allege that in reality none of the touted capabilities existed and the development of AML BitCoin and its blockchain was in the very early stages.

“We allege that these defendants repeatedly misled investors into funding non-existent technology, falsely claiming that the technology would make digital asset transactions more secure,” said Kristina Littman, Chief of the SEC Enforcement Division’s Cyber Unit. “Investors are entitled to truthful information so they can make fully informed investment decisions.”

The SEC seeks permanent injunctions, disgorgement, and civil penalties, as well as injunctions prohibiting NAC and Andrade from participating in future securities offerings, and barring Andrade from serving as a public company officer or director. 

Abramoff appears to have agreed to a settlement imposing permanent and conduct-based injunctions, officer-and-director, industry, and penny stock bars, disgorgement of the $50,000 in commissions he received, plus prejudgment interest of $5,501, and reserves the issue of civil penalties for further determination by the court upon motion of the SEC. The settlement is subject to court approval.

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