US Court Temporarily Freezes $8M in Response to SEC Request Yesterday
Ana Alexandre's original article for cointelegraph.com reduced by 73%
A United States District Court has entered an emergency freeze to preserve $8 million of a New York citizen and two of his entities' related assets following the U.S. Securities and Exchange Commission complaint filed on Aug. 12.
Per the SEC's announcement published on Aug. 13, the court agreed, ordering the temporary freeze of at least $8 million of the $14.8 million Reginald "Reggie" Middleton and two entities under his management, Veritaseum, Inc. and Veritaseum, LLC raised in 2017 and 2018 by conducting a fraudulent and unregistered initial coin offering.
The SEC specifically alleges the defendands of violating the registration and antifraud provisions of the U.S. federal securities laws, as well as manipulative trading. The SEC thus seeks the defendants to pay permanent injunctions, disgorgement, interest, and penalties and a bar from offering digital securities.
Cointelegraph contacted the courthouse, wherein a clerk said that the court approved of the temporary injunction, requiring defendants to show cause on Aug. 22. Earlier in August, SEC commissioner Hester Peirce reportedly said that she is interested in building a non-exclusive safe harbor allowing issuers to offer tokens under an alternative regime with robust requirements.
As Cointelegraph reported in June, SEC Chairman Jay Clayton said that the regulator needs to feel comfortable with cryptocurrency custody and ensure no market manipulation can take place before approving a crypto exchange-traded fund.
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