The U.S. Securities and Exchange Commission (SEC) has settled charges against the cryptocurrency firm Bityqyck Inc. and its founders Sam Mendez and Bruce Bise, according to an official press release published on August 29.
The Director of the SEC’s Texas office in Fort Worth, David Peavler stated: “We allege that the defendants took advantage of investors’ appetite for these investments and fraudulently raised millions of dollars by lying about their business.”
Bise and Mendez created and sold two coins, Bitgy and BitgyM, in unregistered securities offerings to more than 13,000 investors, raising more than $13 million. It is also alleged that investors received $4.5 million for referring new investors to Bitqyck but collectively lost more than two thirds of their actual investment in the company.
The Peavler also observed that “Because digital investment assets represent a new and exciting technology, they can be very alluring, especially if investors believe they are getting in on the ground floor and will own part of the operations.”
This news does not help improve the respectability of cryptocurrencies and follows last week’s report from digital asset market analysts CryptoCompare, which found that 64% of the total aggregate crypto sales volume in July 2019 took place on D-E rated exchanges.
The SEC’s increasing speed and expertise in pursuing unscrupulous figures within the crypto space can be seen as a silver lining, however.