SEC prevents Wyoming-based DAO from registering 2 digital tokens as securities

SEC prevents Wyoming-based DAO from registering 2 digital tokens as securities By Daily EditorBitcoin

The Securities and Exchange Commission alleges that American CryptoFed submitted a “materially flawed and misleading registration form”.

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The Securities and Exchange Commission (SEC) prevented a decentralized autonomous organization (DAO) based in Wyoming will register two digital tokens as securities.

At ad, the SEC’s Compliance Division alleged that on September 16 American CryptoFed “presented a misleading registration form and materially deficient known as Form 10, which sought to register two digital tokens issued by the company: the ‘Ducat’ and the ‘Locke’ – as equities ”.

The SEC claimed that this form lacked mandatory information about the tokens and the business of American CryptoFed, including audited financial statements. He also claimed that Form 10 contained misinformation and was omitting, even if the tokens Ducat and Locke they are values.

In September, American CryptoFed filed a Form S-1 to register the tokens with the SEC for use in a secondary market and in redeemable auctions for a value greater than the original purchase price of CryptoFed. In the presentation, the company described the Ducat and the Locke What “Utility tokens, not as securities.”

It is worth noting, as it says Coindesk, that in July, Wyoming legally recognized American CryptoFed. That determination came after the state became the first in the US to recognize DAOs as a type of limited liability company.

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In its announcement yesterday, the SEC also said that in a Form S-8, an SEC registration form that allows companies to offer securities to employees through employee benefit plans, American CryptoFed did not disclose that completing the form would not legally allow distribution of the tokens.

“Issuers seeking to raise money from the public must provide the information necessary for investors to make informed decisions.”said Kristina Littman, chief of the Cyber ​​Unit in the SEC’s Enforcement Division. “We allege that American CryptoFed made materially misleading statements and failed to provide the legally required information on its registration form. “

An administrative law judge will decide whether to deny or suspend the registration of the tokens, the SEC said.

Sources: SEC, Coindesk

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