Longfin CEO Ordered to Pay $6.8 Million in Crypto Fraud Case
- Longfin and its former Indian CEO are accused with generating fake documents that recorded over $66 million in “sham revenue”
Longfin Corp’s CEO and his now-defunct cryptocurrency company have been ordered to pay $6.8 million to the US Securities and Exchange Commission (SEC) to settle charges relating to accounting fraud and unregistered ICO.
On Monday, the US regulator announced the ruling in the case, which revolved around Longfin and its CEO, Venkata Meenavalli, who is accused of orchestrating a scheme to inflate its revenue.
In its first action, the watchdog accused Longfin of selling more than $33 million of stock in unregistered transactions. In addition, Longfin and its former Indian CEO, who has been indicted by US prosecutors, are accused of generating fake documents that recorded “sham revenue” of more than $66 million.
Indeed, not all was as it seemed as the crypto firm did not actually engage in any revenue-producing transactions, and thus those earnings should never have been recognized. The multimillion-dollar accounting fraud allowed Longfin to report roughly 90 percent of its 2017 revenue as commodities transactions, while, in fact, that were mere “round-trip events” between the company and entities it controlled.
Longfin misrepresented location to meet IPO criteria
To generate further excitement, Longfin secured SEC’s Regulation A+ crowdfunding exemption to go public on the Nasdaq exchange, where its shares promptly rose 13-fold over a few days and briefly making the company worth more than $3 billion.
While applying to obtain Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Read this Term A+ exemption, which allows the firm to raise up to $50 million in its token sale, Longfin falsely claimed to be managed and operated in the US. In fact, the company's operations, assets, and management remained offshore, the SEC said.
The SEC also alleges that Longfin distributed 400,000 free shares to its insiders and Affiliates Affiliates Affiliates serve as an essential component of a broker’s client acquisition tactics and marketing. One of the most important functions of affiliate marketers is the sending of leads to the broker, which are directly opening an account or visiting the broker’s website. There are several ways in which brokers are compensating affiliates based on the number and type of clients they refer to the company and whether or not or how much they end up depositing.Understanding CPA or Cost Per Acquisition T Affiliates serve as an essential component of a broker’s client acquisition tactics and marketing. One of the most important functions of affiliate marketers is the sending of leads to the broker, which are directly opening an account or visiting the broker’s website. There are several ways in which brokers are compensating affiliates based on the number and type of clients they refer to the company and whether or not or how much they end up depositing.Understanding CPA or Cost Per Acquisition T Read this Term in order to meet the criteria for Nasdaq’s fast-track IPO process, without obtaining payment for the shares.
Longfin, which was based in New York and had offices in New Jersey, was ordered in June 2019 with three associates to pay over $26 million in disgorgement and penalties. In that case, the SEC also won a court order of $284,139 and $28,416 in fines against Longfin and Meenavalli, respectively.
Longfin Corp’s CEO and his now-defunct cryptocurrency company have been ordered to pay $6.8 million to the US Securities and Exchange Commission (SEC) to settle charges relating to accounting fraud and unregistered ICO.
On Monday, the US regulator announced the ruling in the case, which revolved around Longfin and its CEO, Venkata Meenavalli, who is accused of orchestrating a scheme to inflate its revenue.
In its first action, the watchdog accused Longfin of selling more than $33 million of stock in unregistered transactions. In addition, Longfin and its former Indian CEO, who has been indicted by US prosecutors, are accused of generating fake documents that recorded “sham revenue” of more than $66 million.
Indeed, not all was as it seemed as the crypto firm did not actually engage in any revenue-producing transactions, and thus those earnings should never have been recognized. The multimillion-dollar accounting fraud allowed Longfin to report roughly 90 percent of its 2017 revenue as commodities transactions, while, in fact, that were mere “round-trip events” between the company and entities it controlled.
Longfin misrepresented location to meet IPO criteria
To generate further excitement, Longfin secured SEC’s Regulation A+ crowdfunding exemption to go public on the Nasdaq exchange, where its shares promptly rose 13-fold over a few days and briefly making the company worth more than $3 billion.
While applying to obtain Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Read this Term A+ exemption, which allows the firm to raise up to $50 million in its token sale, Longfin falsely claimed to be managed and operated in the US. In fact, the company's operations, assets, and management remained offshore, the SEC said.
The SEC also alleges that Longfin distributed 400,000 free shares to its insiders and Affiliates Affiliates Affiliates serve as an essential component of a broker’s client acquisition tactics and marketing. One of the most important functions of affiliate marketers is the sending of leads to the broker, which are directly opening an account or visiting the broker’s website. There are several ways in which brokers are compensating affiliates based on the number and type of clients they refer to the company and whether or not or how much they end up depositing.Understanding CPA or Cost Per Acquisition T Affiliates serve as an essential component of a broker’s client acquisition tactics and marketing. One of the most important functions of affiliate marketers is the sending of leads to the broker, which are directly opening an account or visiting the broker’s website. There are several ways in which brokers are compensating affiliates based on the number and type of clients they refer to the company and whether or not or how much they end up depositing.Understanding CPA or Cost Per Acquisition T Read this Term in order to meet the criteria for Nasdaq’s fast-track IPO process, without obtaining payment for the shares.
Longfin, which was based in New York and had offices in New Jersey, was ordered in June 2019 with three associates to pay over $26 million in disgorgement and penalties. In that case, the SEC also won a court order of $284,139 and $28,416 in fines against Longfin and Meenavalli, respectively.