US securities regulator sues DeFi and its founders

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By Chris Prentice

WASHINGTON, Aug.6 (Reuters) – The United States Securities and Exchange Commission (SEC) on Friday indicted two Florida men and their company for failing to record sales of more than $ 30 million in securities and for inducing misled investors in the regulator’s very first case involving decentralized financial securities.

Blockchain Credit partners and founders Gregory Keough and Derek Acree sold digital tokens that the SEC considered securities without registering with the regulator through their DeFi Money Market platform from February 2020 to February 2021, a the SEC said in a statement. Executives reportedly told investors that interest and profits would be used to buy “real world” assets, which they ultimately couldn’t because of token price volatility.

Keough and Acree agreed to pay penalties of $ 125,000 each. Blockchain Credit and the founders also agreed to forgo $ 12.8 million of ill-gotten gains under a cease-and-desist order agreed to with the SEC.

Cayman Islands-based company Keough and Acree, which neither admitted nor denied the SEC’s findings, could not be reached immediately for comment.

Cryptocurrencies hit a record capitalization of $ 2,000 billion in April, as more investors filled their portfolios with digital tokens and peer-to-peer platforms like DeFi sites grew. more popular, but market surveillance remains uneven. The SEC chairman previously called on lawmakers to give the regulator more power to oversee crypto lending and DeFi sites. (Report by Chris Prentice in Washington edited by Matthew Lewis)

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