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Bailey McCann, Opalesque New York: On Tuesday, the Securities and Exchange Commission marked its first enforcement action against a hedge fund that trades cryptocurrencies. The regulator also announced a settlement with two men who ran an online store for various digital tokens.
The SEC alleges that Crypto Asset Management LP (CAM) offered a fund that operated as an unregistered investment company while falsely marketing it as the "first regulated crypto asset fund in the United States." The firm's founder Timothy Enneking raised more than $3.6 million over a four-month period in late 2017 while falsely claiming that the fund was regulated by the SEC and had filed a registration statement with the agency. By engaging in an unregistered non-exempt public offering and investing more than 40 percent of the fund's assets in digital asset securities, CAM caused the fund to operate as an unregistered investment company. After being contacted by the SEC staff, CAM ceased its public offering and offered buybacks to affected investors.
CAM and Enneking agreed to the SEC's cease-and-desist order and censure without admitting or denying the findings against them, and agreed to pay a penalty of $200,000.
The other charges were brought against TokenLot LLC, a self-described "ICO Superstore," and its owners. According to the SEC, TokenLot's management team Lenny Kugel and Eli L. ...................... To view our full article Click here
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