The U.S. Securities and Exchange Commission, or SEC, publicized legal action against another 2017 Initial Coin Offering, or ICO. Boon.Tech and Rajesh Pavithran, the project’s CEO, face fraud accusations from the commission, as well charges associated with securities registration, an Aug. 13 statement from the SEC detailed.
The statement added:
“According to the SEC’s order, from November 2017 to January 2018, Boon.Tech and Pavithran raised approximately $5 million by selling Boon Coins to more than 1,500 investors in the U.S. and worldwide to raise funding to develop and market a platform to connect employers posting jobs with freelancers seeking work.”
The accusations from the government agency claim Boon Coins as securities, stating the project and its CEO peddled them as an investment without registering them as such.
The statement continued:
“Further, the order finds that Pavithran and Boon.Tech made false and misleading statements, including claims that Boon Coins were stable and secure because Boon.Tech’s platform eliminated volatility inherent in the digital asset markets by using patent-pending technology to hedge Boon Coins against the U.S. dollar, when in fact Boon.Tech had no such patent-pending technology.”
In addition, the accused allegedly boasted of a mainnet which hosted the platform, making it superior to others. The project supposedly used a public blockchain which was already available on the market, however.
As quoted in the statement, chief of the SEC Enforcement Division’s Cyber Unit, Kristina Littman, described the importance of honest information around investments, positing that Boon.Tech and its CEO took advantage of investors with false claims.
The accused parties settled, with Boon.Tech committing to a $600,334 penalty, while also giving up the $5 million of profit.
Pavithran and his company must also “destroy all Boon Coins in their possession, issue requests to remove Boon Coins from any further trading on all third-party digital asset trading platforms, and refrain from participating in any future offerings of digital asset securities,” the statement said. “Further, the order requires Pavithran to pay a penalty of $150,000 and bars him from serving as an officer or director of a public company.”
The SEC has gone after a large number of ICOs over the past several years, showing the taming of an industry once known as the “Wild West.”