SEC Charges Chicago Crypto Capital for Illegally Selling BXY Tokens

Thursday, 15/09/2022 | 05:57 GMT by Arnab Shome
  • BXY was the token issued by the now-defunct crypto exchange, Beaxy.
  • Chicago Crypto Capital sold the tokens from August 2018 to September 2019.
SEC

The US Securities and Exchange Commission (SEC) has brought charges against the crypto broker , Chicago Crypto Capital, its owner Brian Amoah, and two former salesmen, Darcas Oliver Young and Elbert 'Al' Elliott, for defrauding investors by offering them a digital token.

According to the US regulator, the company offered 'crypto asset securities' without registration.

The company allegedly operated from around August 2018 through to November 2019 and, along with its representatives, acted as an unregistered broker-dealer. In addition, it raised $1.5 million 'illegally' from around 100 individuals with the 'unregistered' offering of BXY tokens.

BXY was the native token of the now-defunct crypto exchange, Beaxy. With promises of generating high gains, the exchange entered into an agreement with Chicago Crypto Capital to sell the tokens.

Additionally, the SEC alleged that Chicago Crypto Capital sold the tokens to inexperienced investors.

“The BXY offering was not registered with the Commission and did not satisfy any exemption from registration, and none of the defendants were registered with the Commission as brokers,” the SEC highlighted.

Another Crypto Fraud

On top of that, the complaint alleged that the defendants made false and misleading statements in the offerings of the token. They falsified the custody and delivery of the token and the markup charged by the company.

Moreover, the delivery of account statements was allegedly fabricated, along with the liquidation of the investors’ holdings. Also, the company concealed the financial and management problems occurring at BXY's issuer, Beaxy Digital, in late 2019.

The US regulator alleged that some of the investors of the fraudulent project never received their BXY tokens, and the company paid an undisclosed markup to the investors who actually received the tokens.

The SEC, under Chair Gary Gensler, is aggressively going after fraudulent cryptocurrency projects. The regulator even strengthened its crypto enforcement team earlier this year, which now has more than four dozen dedicated roles.

The US Securities and Exchange Commission (SEC) has brought charges against the crypto broker , Chicago Crypto Capital, its owner Brian Amoah, and two former salesmen, Darcas Oliver Young and Elbert 'Al' Elliott, for defrauding investors by offering them a digital token.

According to the US regulator, the company offered 'crypto asset securities' without registration.

The company allegedly operated from around August 2018 through to November 2019 and, along with its representatives, acted as an unregistered broker-dealer. In addition, it raised $1.5 million 'illegally' from around 100 individuals with the 'unregistered' offering of BXY tokens.

BXY was the native token of the now-defunct crypto exchange, Beaxy. With promises of generating high gains, the exchange entered into an agreement with Chicago Crypto Capital to sell the tokens.

Additionally, the SEC alleged that Chicago Crypto Capital sold the tokens to inexperienced investors.

“The BXY offering was not registered with the Commission and did not satisfy any exemption from registration, and none of the defendants were registered with the Commission as brokers,” the SEC highlighted.

Another Crypto Fraud

On top of that, the complaint alleged that the defendants made false and misleading statements in the offerings of the token. They falsified the custody and delivery of the token and the markup charged by the company.

Moreover, the delivery of account statements was allegedly fabricated, along with the liquidation of the investors’ holdings. Also, the company concealed the financial and management problems occurring at BXY's issuer, Beaxy Digital, in late 2019.

The US regulator alleged that some of the investors of the fraudulent project never received their BXY tokens, and the company paid an undisclosed markup to the investors who actually received the tokens.

The SEC, under Chair Gary Gensler, is aggressively going after fraudulent cryptocurrency projects. The regulator even strengthened its crypto enforcement team earlier this year, which now has more than four dozen dedicated roles.

About the Author: Arnab Shome
Arnab Shome
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About the Author: Arnab Shome
Arnab is an electronics engineer-turned-financial editor. He entered the industry covering the cryptocurrency market for Finance Magnates and later expanded his reach to forex as well. He is passionate about the changing regulatory landscape on financial markets and keenly follows the disruptions in the industry with new-age technologies.
  • 6529 Articles
  • 87 Followers

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