The U.S. Securities and Exchange Commission (SEC) has initiated administrative proceedings against a Wyoming-based agency to determine whether a stop order should be issued regarding two crypto assets.
Authorities indicated the potential action to suspend the registration of the offer and sale of the crypto assets is focused on American CryptoFed DAO LLC, the Ducat token, and the Locke token.
“An issuer seeking to register the offer and sale of crypto assets as securities transactions must furnish the required disclosure information to the SEC,” David Hirsch, chief of the Enforcement Division’s Crypto Assets and Cyber Unit, said. “American CryptoFed not only failed to comply with the disclosure requirements of the federal securities laws, but it also claimed that the securities transactions they seek to register are not, in fact, securities transactions at all. The Enforcement Division is seeking to stop American CryptoFed’s registration to protect investors against misleading information.”
According to the SEC’s Enforcement Division, the agency alleges a Form S-1 registration statement filed by American CryptoFed on September 17, 2021, failed to contain required information about American CryptoFed’s business, management, and financial condition, such as audited financial statements, and contained materially misleading statements and omissions, including inconsistent statements about whether the tokens are securities.
The Enforcement Division also alleges American CryptoFed failed to cooperate while examining its registration statement.