BlockEffect
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2 min read | 7 months ago

ICO fraud fined by US regulators

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The US Securities and Exchange Commission announced on August 14, that it has stopped the ICO of Tomhawkcoin and fined the fraud $30,000.

Token creator, David T. Laurance issued tokens via a “Bounty Program in exchange for promotional services,” according to SEC he “violated the registration and antifraud provisions of the federal securities laws.” This is the second time which Laurance is caught for security fraud. 

Regulars warned, “investors should be alert to the risks of old-school frauds, like oil and gas schemes, masquerading as innovative blockchain-based ICOs.”

Tomahawk presented investors with specious plans to drill for oil in California, erroneously claiming it had the right to do so.

To convince his investors, Laurance convey them an image of making money from drilling oil, and the government allow him to drill for oil in California

“The SEC’s order finds that the defendants’ promotional materials used inflated projections of oil production that were contradicted by the company’s own internal analysis and misleadingly suggested that Tomahawk possessed leases for drilling sites when it did not,”

“...The order also finds that Tomahawk claimed that token owners would be able to convert the Tomahawkcoins into equity and potentially profit from the anticipated oil production and secondary trading of the tokens.”

Statis Group, an ICO advisory firm, found that more than 80% of ICOs in 2017 were scams. In the research, “ over 80 percent of projects (by # share) were identified as scams.”

U.S. regulators continue to ensure the current market ICOs are compliance with regulatory statutes. To raise awareness of the ICO scams, the SEC launched a mock ICO in May.

 

Photograph Retrieved from URL: https://bitcoinexchangeguide.com/sec-punishes-fake-tomahawkcoin-ico-founder-with-30000-usd-fine-and-lifetime-ban/

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